The National Spending Approach and the Factor Income Approach Are

question 149

True/False

The national spending approach and the factor income approach are equivalent ways of measuring GDP because every dollar spent in the economy is ultimately received as income by someone.

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Definitions:

Accounts Receivable

Money owed to a business by its customers for goods or services delivered but not yet paid for, considered a current asset on the balance sheet.

Sales Collected

The actual revenue received from customers, including cash sales and collections on account receivables.

Raw Materials Inventory

The total cost or value of all the raw materials that are to be used in production and are currently stored in inventory.

Raw Materials Production Needs

The quantity and type of raw materials required to meet production targets based on the designed product and manufacturing processes.