Which of the Following Items Is Not a Component of the Expenditure

question 282

Multiple Choice

Which of the following items is not a component of the expenditure approach to measuring U.S. GDP?

• A) purchases of food made by families
• B) Social Security payments made by the government
• C) purchases of U.S.-made movies by Europeans
• D) purchases of new homes made by families

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Definitions:

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and insurance premiums.

Variable Cost

Costs that change in proportion to the level of activity or production volume, such as materials and labor.

Fixed Costs

Costs that remain constant regardless of how much is produced or sold, including expenses like rent, salaries, and insurance.

Net Income

The amount of profit that remains after all operating expenses, taxes, and costs have been subtracted from total revenue, essentially the bottom line.