Suppose a Country Has Real GDP of $10,000 at the Beginning

question 126

Multiple Choice

Suppose a country has real GDP of $10,000 at the beginning of the year 2005. Each year the economy grows by 5 percent. By how much will GDP rise by the end of 2007?

• A) $500
• B) $1,576.25
• C) $1,500
• D) $1,025

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Definitions:

Prime Costs

The combined costs of direct labor and direct materials involved in the production of goods.

Factory Overhead

includes all the indirect costs associated with manufacturing, such as utilities, maintenance, and salaries of indirect labor.

Direct Labor

The labor costs directly associated with the manufacturing of a product, including wages of workers physically involved in production.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.