GDP Counts

question 78

Multiple Choice

GDP counts:

• A)only final goods and services,because otherwise certain things would be double-counted and the GDP would be overestimated.
• B)only intermediate goods and services,because those are easier to track.
• C)both intermediate and final goods and services because it is important to capture all values,regardless of which market they take place in.
• D)those values that are reported to the government.

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Definitions:

Time Value

The idea that money currently in hand is more valuable than an identical sum received later, because of its ability to earn more over time.

Relevant Cash Flow

Cash flows that will occur as a direct result of a decision made by a business, essential in capital budgeting and investment analysis.

Interest Expense

The cost incurred by an entity for borrowed funds, often a significant component of its operating costs.

Initial Cost

The total expense incurred to acquire an asset, including the purchase price and any other costs necessary to get the asset ready for use.