Which of the Following Transactions Would Be Included in GDP

question 33

Multiple Choice

Which of the following transactions would be included in GDP?

• A) Mary buys a used book for $5 at a garage sale.
• B) Nick buys $5,000 worth of stock in Microsoft.
• C) Olivia receives a tax refund of $500.
• D) Peter buys a newly constructed house.

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Definitions:

Times Interest Earned

A ratio that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes to its total interest expenses.

Debt to Equity

A financial metric showing the comparative amount of debt and shareholders' equity utilized to fund a company's assets.

Price/Earnings

A valuation ratio of a company's current share price compared to its per-share earnings, used to assess if a stock is over or undervalued.

Ratio Analysis

A technique of analyzing the strength of a company by forming (financial) ratios out of sets of numbers from the financial statements. Ratios are compared with the competition, recent history, and the firm’s plan to assess the quality of its performance.