The Consumption Category of GDP Includes All Purchases of Final

question 169

Multiple Choice

The consumption category of GDP includes all purchases of final goods and services by households EXCEPT:

• A) new appliances.
• B) new houses.
• C) landscaping work.
• D) new cars.
• E) food.

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Definitions:

Taxable Income

The amount of income used to calculate how much tax an individual or a company owes to the government in a particular tax year.

GAAP

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

Deferred Income Taxes

Taxes that are accrued but not yet paid or collected, often due to differences in accounting methods between tax regulations and accounting principles.

Valuation Allowance

A reserve established against deferred tax assets to reduce their value to an amount that's more likely than not to be realized.