Reading 20: Measuring Economic Activity - LOS b ～ Q1-3 domestic, adjusted, following, 2008

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1.r which of the following is gross domestic product (GDP) adjusted to calculate GDP at factor cost?

A)   Self-employment income.

B)   Rental income.

C)   Corporate trading profits/losses.

D)   A value-added tax.

2.ich of the following statements regarding Gross Domestic Product (GDP) being reported at market prices and at factor cost is most accurate?

A)   Most countries report GDP at both market prices and factor cost.

B)   Most countries report GDP at factor cost only.

C)   Great Britain reports GDP at market prices only, while the United States reports GDP at both market prices and factor cost.

D)   The United States reports GDP at market prices only, while Great Britain reports GDP at both market prices and factor cost.

3.e modification of Gross Domestic Product (GDP) to reflect indirect taxes and subsidies is called the:

A)   gross national income (GNI).

B)   constant price adjustment.

C)   GDP deflator.

D)   factor cost adjustment.

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答案和详解如下：

1.r which of the following is gross domestic product (GDP) adjusted to calculate GDP at factor cost?

A)   Self-employment income.

B)   Rental income.

C)   Corporate trading profits/losses.

D)   A value-added tax.

The correct answer was D)

Factor cost adjustments to GDP include indirect taxes (such as a value-added tax) and subsidies.

2.ich of the following statements regarding Gross Domestic Product (GDP) being reported at market prices and at factor cost is most accurate?

A)   Most countries report GDP at both market prices and factor cost.

B)   Most countries report GDP at factor cost only.

C)   Great Britain reports GDP at market prices only, while the United States reports GDP at both market prices and factor cost.

D)   The United States reports GDP at market prices only, while Great Britain reports GDP at both market prices and factor cost.

The correct answer was D)

U.S. GDP is reported at market prices, while Great Britain reports GDP both ways. Always clarify which method a country is utilizing.

3.e modification of Gross Domestic Product (GDP) to reflect indirect taxes and subsidies is called the:

A)   gross national income (GNI).

B)   constant price adjustment.

C)   GDP deflator.

D)   factor cost adjustment.

The correct answer was D)

The factor cost adjustment is utilized to allow consistent comparisons of the components of the GDP measure (expenditure, income, and output) as well as to isolate the effect of certain governmental policies upon productivity.