GDP Is a Flow Variable Because

question 94

Multiple Choice

GDP is a flow variable because

• A) all macroeconomic aggregates are flow variables
• B) it measures the production that takes place over a period of time
• C) it measures the amount of goods and services that exist at the end of a time period
• D) the number of goods and services produced is usually a fixed number
• E) it accounts for the goods and services transferred from one firm to another

---

Definitions:

Equivalent Units

A measure used in cost accounting to express the amount of work done on incomplete units in terms of fully completed units.

Direct Materials

The raw materials that are directly used in the manufacturing of a product, which can be easily traced to the finished product.

Conversion

The process of changing or converting resources or inputs into final products or outcomes.

Indirect Materials

Any materials needed to make a product that are not directly traced to the product.