CA Foundation Exam > CA Foundation Questions > Which of the following is true about GDP?a)It...
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Which of the following is true about GDP?
- a)It is a stock variable
- b)It is a flow variable
- c)It is a flow variables
- d)Its value is indeterminate
Correct answer is option 'A'. Can you explain this answer?
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Which of the following is true about GDP?a)It is a stock variableb)It ...
Its value is indeterminate
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Which of the following is true about GDP?a)It is a stock variableb)It ...
Explanation:
Definition of GDP:
Gross Domestic Product (GDP) is the total value of all goods and services produced within a country's borders over a specific period of time, usually annually or quarterly.
Stock vs. Flow Variable:
- Stock Variable: A stock variable is a quantity that is measured at a specific point in time. It represents a static amount of a particular measure. For example, the total amount of money in a bank account.
- Flow Variable: A flow variable is a quantity that is measured over a period of time. It represents a rate of change of a particular measure. For example, income earned in a year.
Why GDP is a Stock Variable:
- GDP is a measure of the total value of all goods and services produced within a country's borders over a specific period of time, usually a year.
- It represents the total economic output of a country during that specific period, and it is not a rate of change or accumulation over time.
- Therefore, GDP is a stock variable as it is measured at a point in time and represents a specific value of economic output.
Conclusion:
Given the definition and characteristics of stock and flow variables, it is evident that GDP is a stock variable as it represents the total value of economic output at a specific point in time, usually annually or quarterly.
Definition of GDP:
Gross Domestic Product (GDP) is the total value of all goods and services produced within a country's borders over a specific period of time, usually annually or quarterly.
Stock vs. Flow Variable:
- Stock Variable: A stock variable is a quantity that is measured at a specific point in time. It represents a static amount of a particular measure. For example, the total amount of money in a bank account.
- Flow Variable: A flow variable is a quantity that is measured over a period of time. It represents a rate of change of a particular measure. For example, income earned in a year.
Why GDP is a Stock Variable:
- GDP is a measure of the total value of all goods and services produced within a country's borders over a specific period of time, usually a year.
- It represents the total economic output of a country during that specific period, and it is not a rate of change or accumulation over time.
- Therefore, GDP is a stock variable as it is measured at a point in time and represents a specific value of economic output.
Conclusion:
Given the definition and characteristics of stock and flow variables, it is evident that GDP is a stock variable as it represents the total value of economic output at a specific point in time, usually annually or quarterly.
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Which of the following is true about GDP?a)It is a stock variableb)It is a flow variablec)It is a flow variablesd)Its value is indeterminateCorrect answer is option 'A'. Can you explain this answer?
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Which of the following is true about GDP?a)It is a stock variableb)It is a flow variablec)It is a flow variablesd)Its value is indeterminateCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following is true about GDP?a)It is a stock variableb)It is a flow variablec)It is a flow variablesd)Its value is indeterminateCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is true about GDP?a)It is a stock variableb)It is a flow variablec)It is a flow variablesd)Its value is indeterminateCorrect answer is option 'A'. Can you explain this answer?.
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