Which of the Following Expenditures Would Be Included in GDP

question 105

Multiple Choice

Which of the following expenditures would be included in GDP for this year?

• A) The purchase of a new car.
• B) The purchase of a new tire by General Motors for a new car.
• C) The purchase of a used car.
• D) The purchase of an intermediate good.

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Definitions:

Ending Inventory Valuation

The valuation of goods remaining unsold at the end of an accounting period.

Average Cost Formula

A method used for inventory valuation, determining the cost of goods sold and ending inventory by calculating the weighted average of all purchases and manufacturing costs.

Periodic Inventory System

An accounting system that updates the inventory balance once at the end of the accounting period, using physical counts and purchase records.

Physical Count

The process of manually counting and verifying the amounts of inventory a company physically has in its possession.