The Expenditures or Output Approach to GDP Measures It by Summing

question 210

Multiple Choice

The expenditures or output approach to GDP measures it by summing up

• A) compensation of employees, rents, interest, dividends, undistributed corporate profits, proprietors' income, indirect business taxes paid, consumption of fixed capital, and net
• Foreign factor income earned in the United States.
• B) compensation of employees, rents, interest, dividends, corporate profits, proprietors' income, and indirect business taxes, and subtracting the consumption of fixed capital.
• C) the total spending for consumption, investment, net exports, and government purchases.
• D) the total spending for consumption and government purchases, but subtracting public and private transfer payments.

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Definitions:

Operating Activities

Activities that relate directly to the principal revenue-generating activities of a business, such as sales and service provision.

Indirect Method

A method used in cash flow statements to adjust net income for non-cash transactions and changes in working capital to arrive at operating cash flow.

Cash Flows

The complete sum of cash flowing in and out of a company, particularly influencing its ability to cover immediate expenses.

Investments

Assets purchased with the expectation that they will generate income or appreciate in value over time.