Consider a Firm Producing Car Parts in Oshawa,Ontario

question 5

Multiple Choice

Consider a firm producing car parts in Oshawa,Ontario.In determining this firm's value added to national income,we would start with its total revenue and subtract the cost of (among other things)
1) imported plastic molds;
2) labour costs for sales and marketing;
3) computer-aided design (CAD) equipment.

• A)1 and 2
• B)2 and 3
• C)1 and 3
• D)1 only
• E)2 only

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Definitions:

Real GDP

A metric that adjusts for inflation to show the value of all goods and services produced in an economy during a specific year, using prices from a chosen base year.

Short-run

A period in economics during which at least one factor of production is considered fixed and unchangeable, limiting the ability of the economy to adjust to changes in market conditions.

Output

The quantity of goods or services produced within a given timeframe by a firm, industry, or country.

Economy

The large set of inter-related production, consumption, and exchange activities that aid in determining how scarce resources are allocated.