In Computing GDP,market Prices Are Used to Value Final Goods

question 25

Multiple Choice

In computing GDP,market prices are used to value final goods and services because

• A)market prices do not change much over time,so it is easy to make comparisons between years.
• B)market prices reflect the values of goods and services.
• C)market prices reflect the quantity sold.
• D)None of the above is correct;market prices are not used in computing GDP.

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Definitions:

Risk-Free Asset

An investment with a guaranteed return and no risk of financial loss, typically represented by government bonds.

Expected Return

The average return on an investment calculated by multiplying each possible outcome by its probability and then summing all these values.

Market

A place or mechanism through which buyers and sellers interact to trade goods, services, or financial instruments.

Beta

A measure of a stock's volatility in relation to the overall market, indicating its level of risk associated with market movements.