When Estimating GDP Using the Income Approach, Aggregate Income Is

question 177

Multiple Choice

When estimating GDP using the income approach, aggregate income is adjusted by

• A)adding depreciation.
• B)adding net income earned abroad.
• C)subtracting indirect business taxes.
• D)subtracting depreciation.

---

Definitions:

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and adjusted over time for the investor's share of the investee's net profits or losses.

Undervalued Inventory

Inventory items that are reported at a value lower than their actual market value or cost of replacement.

Non-Controlling Interest

A minority shareholding in a company, representing an ownership stake that is less than 50% and does not allow for control over the company's operations.

Acquisition Differential

Refers to the difference between the purchase price of an asset and its fair market value at the time of acquisition.