Which of the Following Transactions Would Be Included in Gross

question 13

Multiple Choice

Which of the following transactions would be included in Gross Domestic Product (GDP) ?

• A) the purchase of new tires by a family to replace worn out tires on the family car
• B) the purchase of a used car
• C) the purchase of 100 shares of General Motors stock
• D) the purchase of 2 grams of cocaine

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Definitions:

Direct Labor

The cost of labor that is directly involved in the production of goods or services.

Manufacturing Overhead

Refers to the indirect factory-related costs incurred when manufacturing a product or performing a service, which may include the cost of utilities, depreciation, and salaries of maintenance personnel.

Total Manufacturing Costs

The sum of all costs directly involved in the production of a good, including direct materials, direct labor, and manufacturing overhead.

Direct Materials

The specific raw materials used in the production of goods that can be directly attributed to the finished product, contributing directly to its manufacture.