Which of the Following Observations Concerning GDP Calculations Is True

question 126

Multiple Choice

Which of the following observations concerning GDP calculations is true?

• A)Goods and services produced by governments are valued at market price.
• B)Inventories are treated as if they are yet to be sold.
• C)Goods produced but not sold during the year are counted in that year's GDP.
• D)Goods that firms add to their inventories do not count in the GDP.

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Definitions:

Adjusted Balance

A method used to calculate the balance of an account after adjusting for any debits and credits that have occurred during the period.

Prepaid Insurance

Prepaid Insurance is the portion of an insurance premium that has been paid in advance and is recognized as an asset until the coverage period lapses.

Adjusted Balance

A method of calculating account balances that takes into account all debits and credits, including pending transactions, at the end of a period.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value of the asset over time.