Undistributed Profits ________ Counted as Part of GDP Because ________

question 256

Multiple Choice

Undistributed profits ________ counted as part of GDP because ________.

• A)are not;households are not paid by the firms
• B)are;they can be used to buy other goods
• C)are;they are considered income paid to households and loaned back to firms
• D)are not;they are considered an intermediate good
• E)are;firms are required to pay corporate income taxes on them

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Definitions:

Volume Variance

The difference between the planned volume of output and the actual volume of output, which affects costs.

Fixed Manufacturing Overhead

Indirect manufacturing costs that do not vary with the level of production, including salaries of production supervisors, rent for the factory building, and depreciation of manufacturing equipment.

Volume Variance

A financial metric that measures the difference between the planned volume of production or sales and the actual volume, affecting revenue and costs.

Manufacturing Overhead

Consists of indirect factory-related costs that are incurred when producing a product, such as maintenance, utilities, and salaries of supervisors.