The Expenditure Approach to Calculating GDP Includes

question 22

Multiple Choice

The expenditure approach to calculating GDP includes

• A) wage income.
• B) investment.
• C) all forms of taxation.
• D) the sum of government spending on goods and services, transfer payments, and interest on the national debt.
• E) corporate profits.

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Definitions:

Effective Tax Rate

The average rate at which an individual or corporation is taxed, calculated by dividing the total tax paid by taxable income.

Income Tax Expense

The amount of money a company or individual owes in taxes based on their taxable income for a given period.

Pre-tax Book Income

The income a company reports to investors before the application of income tax and other deductions as per accounting standards.

Income Tax Expense

The total amount charged against earnings based on corporate and governmental tax regulations.