The Reason That Only Final Sales Count in GDP Is

question 22

Multiple Choice

The reason that only final sales count in GDP is to

• A)make it easier to do the accounting.
• B)avoid double counting.
• C)undervalue labor.
• D)overvalue capital.

---

Definitions:

Activity-Based System

A method in accounting that allocates costs to specific activities based on their use of resources, aimed at providing more accurate cost information.

Non-Volume-Based Costs

Costs that do not vary directly with the volume of production or sales, often encompassing fixed costs like rent or salaries.

Volume-Based Costs

Costs that vary directly with the level of production or sales volume, such as direct materials and direct labor, contrasting with fixed costs that remain constant regardless of volume.

Qualitative Characteristics

The attributes that make financial information useful to users, including relevance and faithful representation.