Which of the Following Is Included in GDP

question 164

Multiple Choice

Which of the following is included in GDP?

• A) A newly laid-off worker receives his $400 unemployment compensation check from the state government.
• B) A college senior receives a $1,000 graduation gift from a grandparent.
• C) You buy a $12 snow shovel to have on hand for the next snow storm.
• D) You purchase $300 worth of clothes from a thrift shop selling second-hand clothing.

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Definitions:

Period Cost

Expenses that are not tied directly to product production and are expensed in the period they are incurred.

Absorption Costing

A method of accounting which integrates all costs related to manufacturing, from direct materials and labor to variable and fixed overhead, into the product’s pricing.

Absorption Costing

A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed overheads—in the cost of a product.

Variable Costing Income Statement

An income statement format that deducts only variable costs from sales to compute contribution margin, followed by the deduction of fixed costs to determine net income.