1. GDP can be measured in terms of expenditures but not income, since income is
ID: 1125370 • Letter: 1
Question
1. GDP can be measured in terms of expenditures but not income, since income is subject to taxation.
True
False
--------------------------------------
2. Income rises after a charity gives poor families free livestock. The harvest that year was also particularly bountiful. The charity should take full credit for the observed increase in the standard of living.
True
False
-------------------------------------------------------------------
3. Fred operates his own business, Fred would be counted as employed
in neither the household nor the establishment survey.
in the household but not the establishment survey.
in the establishment but not the household survey.
in both the household and estblishment surveys.
------------------------
4. In the simple circular-flow diagram, with households and firms, GDP can be computed
as the income received by households in the form of wages.
as the payments made by firms for labor.
as the profits received by households.
as the income received by households, in the form of wages, rent and profit.
a.in neither the household nor the establishment survey.
b.in the household but not the establishment survey.
c.in the establishment but not the household survey.
d.in both the household and estblishment surveys.
------------------------
Explanation / Answer
1. False.
GDP can be measured with the help of both income and expenditures. Infact there are three approaches of calculating GDP, which are 1) Production Approach, 2) Income Approach, 3) Expenditure Approach.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.