Assuming That There Is No Capital Depreciation and No Business

question 158

Multiple Choice

Assuming that there is no capital depreciation and no business saving, what is the relationship between GDP and aggregate income in an economy?

• A) GDP is greater than aggregate income.
• B) GDP is less than aggregate income.
• C) GDP is equal to aggregate income.
• D) GDP is equal to aggregate income plus investment.
• E) GDP is unrelated to aggregate income.

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Definitions:

Prepaid Expenses

Prepaid expenses are future expenses that have been paid in advance and are recorded as assets until they are actually incurred.

Dividends Payable

The amount of declared dividends that a company has committed to pay out to its shareholders but has not yet distributed.

Prepaid Assets

Assets that represent future expenses that have been paid in advance and will be recognized as expenses when they are actually incurred.

Accounts Payable

Liabilities of a business that are yet to be paid out to creditors, typically for purchases of goods and services.