GDP Tends to Underestimate the Productive Activity in the Economy

question 13

Multiple Choice

GDP tends to underestimate the productive activity in the economy because it excludes the value of output from

• A)public transfer payments to households.
• B)the consumption of fixed capital.
• C)the underground economy.
• D)intermediate goods.

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Definitions:

Yield-To-Maturity

The expected total yield on a bond when held to its maturity date, stated as a yearly percentage.

Coupon Rate

The interest paid annually on a bond, indicated as a percentage of its face value.

Annually

Occurring once every year, often used to describe events or measurements that are taken or occur once per year.

Maturity

In finance, maturity is the time at which the principal amount of a bond, loan, or other debt instrument becomes due and payable.