Underground Activities Are Not Counted in GDP Because

question 82

Multiple Choice

Underground activities are not counted in GDP because

• A) some underground activities are illegal and the government doesn't want to place,for instance,drug dealers on an equal footing with small businesses.
• B) there are no written records of underground activities.
• C) of a decision made in the 1930s and no one has gotten around to changing it yet.
• D) although it is possible to accurately measure underground activities,it is harder than measuring above-ground activities because with the latter,one doesn't have to dig as deep.

Acknowledge the function of financial reports in executive performance evaluation and stewardship.

Recognize the contractual use of financial statement numbers in business operations.

Understand the concept and application of activity-based costing (ABC).

Distinguish between different levels of activities (Unit-level, batch-level, product-level, facility level).

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Definitions:

Capital in Excess of Par

The amount by which the proceeds from the issuance of shares exceed the par value of the shares, often recorded in the shareholders' equity section of the balance sheet.

Homemade Dividend

A strategy where investors create their own dividend policy by selling a portion of their portfolio.

Required Return

The minimum annual percentage earned by an investment that will entice individuals or companies to put money into a particular security or project.

Dividend

A portion of a company's earnings distributed to its shareholders, usually in cash or additional shares.