The Expenditure Approach Measures GDP by Adding Together

question 98

Multiple Choice

The expenditure approach measures GDP by adding together

• A)wages, salaries and supplementary labour income, and other factor incomes.
• B)wages, salaries and supplementary labour income, other factor income, subsidies paid by the government, indirect taxes paid, and income of nonfarm unincorporated businesses.
• C)compensation of employees, rental income, corporate profits, net interest, proprietors' income, indirect taxes paid, and capital consumption expenditures, and by subtracting subsidies paid by the government.
• D)the total expenditures of consumers, firms, net exporters, and by governments at all levels.
• E)the total expenditures of consumers and firms.

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Definitions:

Capital Equity

Equity capital that is invested into a company by investors who purchase shares of stock, providing long-term funding for business operations.

Income Sharing Ratio

Income sharing ratio refers to the pre-agreed proportion used to distribute profits or losses among partners in a partnership according to their partnership agreement.

Partners' Equity

The total amount of capital contributed by partners plus their accumulated profits retained in the business.

Capital Account Balances

The financial records that show the equity ownership and investment contributions of partners or shareholders in a business.