Which of the Following Is True Regarding the Measurement of GDP

question 8

Multiple Choice

Which of the following is true regarding the measurement of GDP?

• A)Wages and profit income are used in the income approach to GDP.
• B)Wages and consumption are used in the expenditure approach to GDP.
• C)Consumption and investment are used in the income approach to GDP.
• D)Government expenditure is only counted in the income approach to GDP.
• E)Investment and wages are expenditures,and are therefore are used in the expenditure approach to GDP.

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Definitions:

Expected Value

A calculated average of all possible values for a random variable, reflecting the expected level of gain or loss over time for a given situation or set of outcomes.

Perfect Information

Perfect information is a situation in which all participants in a transaction have complete and identical knowledge about all aspects of the transaction, leaving no room for uncertainty.