Recently,the ABS Made Adjustments to How GDP Is Calculated That

question 6

Multiple Choice

Recently,the ABS made adjustments to how GDP is calculated that included placing software purchases into the category of

• A)intermediate goods because software is not a final good.
• B)investment and now directly counts software purchases as part of GDP.
• C)inventory and now software purchases are not directly counted as part of GDP.
• D)net exports of goods and services because most software is written abroad.
• E)net operating surplus.

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Definitions:

Gross Profit Method

An accounting technique used to estimate the ending inventory and cost of goods sold by calculating the gross profit margin.

Destroyed Inventory

Goods that have been damaged or rendered unsellable, resulting in a loss for the business.

Retail Inventory Method

An accounting procedure for estimating the value of a store's merchandise by using a percentage of the retail prices.

Cost-to-Retail Ratio

The cost-to-retail ratio is a calculation used in inventory management to estimate the value of ending inventory at retail prices by considering the cost and retail value of goods available for sale.