The GDP of a Country Can Be Derived by Summing

question 52

Multiple Choice

The GDP of a country can be derived by summing the:

• A) expenditures on final goods and services produced domestically during the year.
• B) payments to employees and owners of capital resources and then subtracting depreciation and indirect business taxes.
• C) market value of all goods and services produced domestically during the period and then subtracting net exports from that figure.
• D) income payments to the resource suppliers and net exports.

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Definitions:

Marginal Propensity

The ratio of the change in consumption or saving to the change in income, indicating how income changes affect spending or saving behaviors.

Aggregate Expenditure

The total amount of spending in the economy that includes consumer spending, investment, government spending, and net exports.

Multiplier

An economic factor that quantifies the change in income levels resulting from a change in spending or investment.

Gross Domestic Product

The total value of all goods and services produced within a country over a specific time period, serving as a broad measure of economic activity.