Two Equivalent Ways to View GDP Are as The

question 34

Multiple Choice

Two equivalent ways to view GDP are as the:

• A) total payments made to all workers in the economy or the total profits of all firms and businesses in the economy.
• B) total expenditures on all goods produced in the economy or the total income earned from producing all services in the economy.
• C) total profits of all firms and businesses in the economy or the total consumption of goods and services by all households in the economy.
• D) total income of everyone in the economy or the total expenditure on the economy's output of goods and services.

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Definitions:

Variable Labor

The aspect of labor costs that varies with the level of production or business activity within a given period.

Fixed Capital

Refers to the long-term assets used in production, including buildings, machinery, and equipment, which are not frequently replaced.

Total Variable Cost

The total of expenses that change in proportion to the activity or production level of a business.

Economic Costs

The total cost of choosing one action over another, including both explicit and implicit costs.