The Measurement of GDP Includes

question 2

Multiple Choice

The measurement of GDP includes

• A)nonmarket goods such as homemaking and child-rearing.
• B)the benefits of clean air and water.
• C)estimated values of activity in the underground economy.
• D)purchases and sales of goods produced in previous periods.

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Definitions:

Construction in Progress Account

An account in the balance sheet that accumulates costs related to the construction of a long-term asset until the asset is ready for use, at which point the total cost is transferred to the fixed assets account.

GAAP

Generally Accepted Accounting Principles, which are a collection of commonly-followed accounting rules and standards for financial reporting.

Research and Development

The investigative activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedures.

Write-down

An accounting procedure reducing the book value of an asset when its market value drops below the recorded cost, resulting in a non-cash expense.