If Consumption Was 70 Per Cent of GDP and Investment

question 54

Multiple Choice

If consumption was 70 per cent of GDP and investment and government expenditure were both each, then we see that

• A) GDP can be over 100 per cent because it is "gross" rather than "net."
• B) exports must be more than imports.
• C) we must subtract depreciation from investment so that the components of GDP do not exceed .
• D) exports must be less than imports.
• E) the error is due to rounding.

Recognize the application and development process of predictive statistics.

Appreciate the advantages and disadvantages of census vs. sampling in data collection.

Understand the differences between temporary and permanent accounts and their roles in the accounting cycle.

Distinguish between classified and unclassified balance sheets and their importance to stakeholders.

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Definitions:

Positive Economic Profits

Profits that exceed the opportunity costs of a production enterprise, indicating a more favorable outcome than alternative investments.

Economic Losses

Occur when a company's total costs exceed its total revenues, indicating a negative outcome from business operations.

Representative Firm

A representative firm is a hypothetical entity in economic models used to represent the typical characteristics of firms within a particular industry or market.

Breaking Even

Breaking even refers to a financial situation where total costs and total revenues are equal, resulting in no net loss or gain for the business.