When One Uses the Expenditure Approach to Calculate Gross Domestic

question 377

Multiple Choice

When one uses the expenditure approach to calculate Gross Domestic Product (GDP) , which of the following would be included?

• A) government spending at the state level
• B) household purchases of legal services
• C) inventory investment
• D) all of the above

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Definitions:

Capital Lease

A lease treated as an acquisition of an asset and the incurrence of an obligation on the lessee's balance sheet, indicating a purchase and financing arrangement.

Lease Liability

An obligation representing the present value of future lease payments under a non-cancellable lease.

Operating Lease

A lease agreement that allows for the use of an asset but does not transfer ownership of the asset to the lessee, often with shorter terms.

Lease Asset

An asset that is subject to a lease agreement, where the lessee has the right to use the asset for the lease term.