Gross Domestic Product Is Equal to the Sum of Consumption

question 237

Multiple Choice

Gross Domestic Product is equal to the sum of consumption expenditure, investment, net exports, and

• A) government expenditures on goods and services.
• B) saving.
• C) profits.
• D) net taxes.

---

Definitions:

Production Subsidies

Financial support given by the government to producers or manufacturers to help reduce the cost of producing goods or services.

External Costs

These are costs of a transaction that affect someone who did not choose to incur that cost, often not reflected in the market prices.

Adverse Selection

A situation in which one party in a transaction has more or better information than the other, often leading to an imbalance and inefficient market outcomes.

Home Insurance

A type of insurance policy that provides coverage for damages or losses to an individual’s residence and possessions.