Potential GDP Would Increase If

question 65

Multiple Choice

Potential GDP would increase if

• A)the rate of capital depreciation increased.
• B)the labor force decreased.
• C)the price level grew.
• D)the rate of capital growth increased.

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Definitions:

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, decay, or decline in value over time.

Salvage Value

The estimated resale value of an asset at the end of its useful life, used in calculating depreciation expenses.

Half-Year Convention

A tax and accounting method that treats all assets acquired or disposed of during a year as being acquired or disposed at the midpoint of that year.

Sum-Of-The-Years'-Digits

An accelerated depreciation method that applies a decreasing fraction to the depreciable cost of an asset over its useful life.