When using the income approach to measure GDP at market prices, in addition to summing all factor incomes it is necessary to ________
A. subtract depreciation because profit is not reported as net profit
B. add depreciation because capital depreciates when goods are manu-factured
C. add indirect taxes less subsidies to convert aggregate income from factor cost to market prices
D. add a statistical discrepancy which is the sum of depreciation and in-direct taxes less subsidies
C The discussion on pages 375 and 376 of the text illustrate that answer C is correct.
You might also like to view...
During the period from 1999 - 2008, federal budget deficits
A. were never calculated. B. fell dramatically. C. increased as a percentage of GDP. D. can be regarded as structural.
Which of the following has led to reduced use of ATMs?
A) some banks closing branches in low-income neighborhoods B) some banks charging fees for transactions performed by tellers that could be done by ATMs C) increased use of debit card transactions D) reductions in fees for overdrafts
Because industrial countries depend upon the less developed countries for their food and raw materials, the less-developed countries account for the majority of world trade
Indicate whether the statement is true or false
Which of the following statements is NOT true about the production function?
A) It gives the maximum output that can be obtained for a given level of inputs. B) A new production function does not have to be developed when there is technical progress since technology is included in the function. C) The production function depends upon the level of technology available to the firm. D) It specifies the cost of inputs necessary to produce a certain level of outputs.