Answer the Following Questions

question 192

Essay

Answer the following questions:
a.In 2004, four major hurricanes hit Florida. Explain how this destruction of property, and the rebuilding that went on afterward, affected GDP.
b.Explain how GDP has trouble accounting for other parts of the economy as well.

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Definitions:

Unit Product Cost

The total cost (both variable and fixed costs) associated with producing a single unit of a product.

Variable Costing

A method of inventory costing that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs, excluding fixed manufacturing overhead.

Per Unit

A term that refers to expressing costs, revenues, or any other financial metric on a per unit of production or per unit of sale basis.

Fixed Manufacturing Overhead

These are production costs that do not change with the level of manufacturing activity, such as rent for factory premises.