Asked by Andrew Lujan on Apr 26, 2024
Verified
Statement I: Both final and intermediate goods are counted when measuring GDP.
Statement II: GDP minus depreciation equals net private domestic investment.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
Intermediate Goods
Goods that are used as inputs in the production of other goods and services, rather than being sold directly to end consumers.
GDP
The Gross Domestic Product measures the overall market or financial worth of every completed good and service produced within a country's borders in a set period.
Depreciation
The process by which capital assets decrease in value over time due to wear and tear or obsolescence.
- Recognize the classifications of expenses counted toward and left out of the Gross Domestic Product.
- Understand the significance of investment, encompassing both net and gross investment, within the economic framework.
Verified Answer
BT
Briamber TerrellMay 02, 2024
Final Answer :
D
Explanation :
Statement I is false because only final goods are counted in GDP to avoid double counting. Statement II is false because GDP minus depreciation equals Net Domestic Product (NDP), not net private domestic investment.
Learning Objectives
- Recognize the classifications of expenses counted toward and left out of the Gross Domestic Product.
- Understand the significance of investment, encompassing both net and gross investment, within the economic framework.