Which of the Following Correctly States the Relationship Between GDP

question 169

Multiple Choice

Which of the following correctly states the relationship between GDP and GNP for the U.S.?

• A) GDP equals GNP minus the net income of foreigners.
• B) GDP equals GNP plus the net income of foreigners.
• C) GDP equals GNP minus indirect business taxes.
• D) GDP equals GNP.

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Definitions:

Contribution Margin Ratio

The percentage of each dollar of sales that is available to apply to fixed costs and contribute to net income; calculated as unit contribution margin divided by unit selling price.

Unit Contribution Margin

The amount of revenue remaining per unit after deducting variable costs; calculated as unit selling price minus unit variable costs.

Unit Sales Price

The amount that a business charges for one unit of its product or service.

High-Low Method

A technique used in cost accounting to estimate variable and fixed costs based on the highest and lowest levels of activity.