Which of the Following Might Result in an Underestimation of GDP

question 182

Multiple Choice

Which of the following might result in an underestimation of GDP?

• A) Significant underground activity such as trade in illegal drugs
• B) Sales of used cars
• C) Many intermediate goods
• D) Imported goods
• E) Exported goods

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Definitions:

Capital Investment Analysis

The process by which management plans, evaluates, and controls investments in fixed assets.

Present Value

The value of an asset or cash at present that is equivalent in value to a specified sum in the future.

Average Rate of Return

A financial ratio used to estimate the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.

Average Rate of Return

A calculation to determine the profitability of an investment, measuring the average annual return over the investment's lifespan compared to the initial cost.