AICPA Exam CPA-Business Topic 2 Question 72 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 72
Topic #: 2

[All CPA-Business Questions]

Under the expenditure approach, GDP can be calculated as the sum of:

AConsumption, money supply, government purchases, and exports.

BConsumption, investment, transfer payments, and imports.

CConsumption, investment, government purchases, and net exports.

DConsumption, investment, government purchases, and foreign exchange.

Show Suggested Answer

Suggested Answer: D

Choice 'd' is correct. Inspections. Inspections are part of order costs, not carrying costs.

Choices 'a' and 'c' are incorrect. Inventory carrying costs include all costs associated with warehousing (storing) inventory (e.g., storage, insurance, obsolescence, and spoilage associated with holding inventory).

Choice 'b' is incorrect. The economic cost of holding inventory includes the implicit (opportunity) cost of foregoing a return on the money invested in inventory.

by Lizette at Jul 25, 2023, 09:00 AM

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Caitlin

28 days ago

B) Consumption, investment, transfer payments, and imports. Hmm, sounds like a recipe for a really depressing GDP calculation. Where's the fun in that?

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Lauran

1 months ago

D) Consumption, investment, government purchases, and foreign exchange. Ah, the good old 'foreign exchange' approach to GDP. I hear that's the preferred method in the Galactic Empire.

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Devorah

1 months ago

A) Consumption, money supply, government purchases, and exports. Wait, what? Money supply? That's definitely not part of the expenditure approach. I'm pretty sure my calculator has a GDP formula button, though.

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Gregoria

8 days ago

B) Consumption, investment, transfer payments, and imports.

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Shelton

12 days ago

C) Consumption, investment, government purchases, and net exports.

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1 months ago

I was sure it was D) Consumption, investment, government purchases, and foreign exchange. I should have paid more attention in my macroeconomics class.

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Brice

3 days ago

Bulah: Nope, it's C. Don't worry, it can be confusing sometimes.

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Bulah

4 days ago

User 2: Really? I thought it was D) Consumption, investment, government purchases, and foreign exchange.

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Shayne

1 months ago

User 1: It's actually C) Consumption, investment, government purchases, and net exports.

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3 months ago

I think the answer is C.

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