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Econ fiesta!

Was doing some econ questions from QBank, and the questions look alien to me. Though they are really simple ones (if you remember the context), I was just not able to recall if I have read anything like this before. I hope such blackout doesn’t happen on the test day.

When considering the effect of depreciation on the measurement of a countrys economic activity, most economists believe it:

A) must be included in the calculation in order to provide the most accurate assessment of the countrys economic position.
B) may or may not be included in the calculation as long the calculation is clearly identified as a gross or net number.
C) is difficult to accurately quantify and is generally excluded from the calculation.
D) should only be included if it represents an amount greater than 5% of total production.

Gross Domestic Product (GDP) typically understates a countrys productivity because it does not fully account for:

A) depreciation / depletion of assets.
B) any productive assets physically located in other countries.
C) the countrys shadow economy.
D) transfer payments

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C, C. I think.

C, C

C….this is in the text/schweser.

C
C

Anish Sharma

C C

for sure..if i’m wrong..i’ll be really upset…

B, C, the first one I’m not completly sure on

#FreeCVM #FreeTurd #2007-2017

C? for 1, I think

C for 2

Im going for

C
B

Correct -> C,C

I think economic activity is measured by GDP, GNI and NNI off which GDP and GNI do incorporate depreciation of the assets, but we back out depreciation from GNI to come to NNI. So how could you all say that ‘depreciation is generally excluded in the calculations’????

GDP and GNI do not include depreciation in their calculations..for precisely the reason in answer C - it is difficult to tabulate….

NNI does because it is GNI - Dep, which means depreciation is being considered..

easy way to remember…GDP and GNI are both GROSS measures…hence no depreciation is factored in..

Thanks mumu, that helped my fuzzy-logic

thanks, mumukada. very helpful …