In Calculating GDP, We Must

question 8

Multiple Choice

In calculating GDP, we must

• A) add the value of the goods produced outside of Australia by local firms.
• B) add the market value of imports and subtract the market value of exports.
• C) add the market value of exports and subtract the market value of imports.
• D) exclude net exports of goods and services (NX).
• E) subtract the market value of imports, because these goods are produced in a country other than Australia, and subtract the market value of exports, because these goods are consumed in a country other than Australia.

---

Definitions:

Collateralized Borrowing

Obtaining a loan by pledging an asset as security for the loan, which the lender can seize if the borrower defaults.

Assets

Resources owned by a company that provide future economic benefits.

Liabilities

Financial obligations or debts that an entity owes to others, which must be settled over time through the transfer of economic benefits.

Surrenders Control

The action of relinquishing authority, power, or ownership over an entity, asset, or decision-making process to another party.