Which of the Following Statements Is True

question 88

Multiple Choice

Which of the following statements is true?

• A)GDP and GNP are always the same because the net factor payments from abroad is always zero.
• B)GDP is always greater than GNP because the net factor payments from abroad is always negative.
• C)GNP is always greater than GDP because the net factor payments from abroad is always positive.
• D)GDP may be greater,equal,or smaller than GNP because the net factor payments from abroad may be negative,zero,or positive.

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Definitions:

Straight-Line Method

An accounting method of depreciation where the value of a fixed asset is reduced uniformly over its useful life.

Depreciable Amount

The cost of an asset, or other amount substituted for cost, less its residual value.

Residual Value

The estimated amount that an asset will realize upon its disposal at the end of its useful life after deducting expected costs of disposal.

Annual Depreciation

The portion of the cost of a fixed asset that is expensed each year over its useful life as a way to allocate the cost over time.