Classify Each of the Following Costs Associated with Long-Lived Assets

question 13

Multiple Choice

Classify each of the following costs associated with long-lived assets as one of the following:
-Costs of government permits required to develop land for a new business location

• A)Buildings
• B)Machinery and equipment
• C)Land
• D)Land improvements

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Definitions:

GDP Deflator

An economic metric that converts output measured at current prices into constant-dollar terms to assess real growth.

Nominal GDP

The market value of all finished goods and services produced within a country in a year, measured in current prices.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by an economy in real terms.

GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy, used to adjust nominal GDP to real GDP.