In Computing GDP,market Prices Are Used to Value Final Goods

question 200

Multiple Choice

In computing GDP,market prices are used to value final goods and services because

• A)market prices reflect the values of goods and services.
• B)market prices do not change much over time, so it is easy to make comparisons between years.
• C)if market prices are out of line with how people value goods, the government sets price ceilings and price floors.
• D)None of the above is correct; market prices are not used in computing GDP.

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Definitions:

Best Efforts Basis

A commitment to perform a task to the best of one's ability, often used in financial transactions to indicate that an underwriter or other party will endeavor to sell as much of an offering as possible without guarantees.

IPO Issues

Refers to the various considerations and challenges that arise during the Initial Public Offering process when a company goes public and offers shares to the public for the first time.

Shelf Prospectus

A regulatory document filed by a company that allows it to issue shares to the public without having to re-file with the securities commission for each offering.

Syndicated Offering

A financial transaction in which multiple lenders or underwriters jointly provide funds or purchase a security issuance.