"To Calculate GDP, Economists Begin with Total Income Earned and Then

question 223

Essay

"To calculate GDP, economists begin with total income earned and then subtract total expenditure by the four sectors of the economy." Is the previous sentence true or false? Explain your answer.

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Definitions:

Required Return

The minimum expected return an investor demands for holding a particularly risky investment.

Market Capitalization Rate

An alternative term often used to refer to the cost of equity or the expected return of a market portfolio.

Plowback Ratio

A metric indicating the percentage of earnings retained by a company after dividends have been paid out to shareholders.

P/E Ratio

A valuation metric that compares the current share price of a company to its per-share earnings.