For Purposes of Calculating GDP Using the Expenditure Approach,which of the Following

question 313

Multiple Choice

For purposes of calculating GDP using the expenditure approach,which of the following payments is NOT included in the government spending component?

• A)Social Security pensions
• B)The wages paid by a local government to its road crew
• C)The wages paid by a state government to the workers in its welfare department
• D)The federal government's purchase of a submarine from a shipbuilder
• E)None of the choices are correct

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Definitions:

Appropriately Recognized

Pertains to the correct recording of financial transactions and elements in accordance with accounting standards and principles.

Critical Event

A significant occurrence or moment that has the potential to impact the course or outcome of a process or situation dramatically.

Generally Accepted Accounting Principles (GAAP)

A collection of commonly-followed accounting rules and standards for financial reporting within the United States.

Reported Profit

The profit figure announced by a company, typically found in its financial statements, after accounting for all expenses.