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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:

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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
1 months 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
2 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
21 days ago
B) Consumption, investment, transfer payments, and imports.
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Shelton
24 days ago
C) Consumption, investment, government purchases, and net exports.
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Kayleigh
2 months ago
B) Consumption, investment, transfer payments, and imports. Ah, the classic mistake of confusing the expenditure approach with the income approach. Gotta love these tricky GDP questions!
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Pamella
12 days ago
C) Consumption, investment, government purchases, and net exports. Understanding the different approaches to calculating GDP can be challenging, but it's important to grasp the concepts.
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Lourdes
25 days ago
B) Consumption, investment, transfer payments, and imports. It's easy to mix up the components, but with practice, you'll get the hang of it!
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Shawna
29 days ago
C) Consumption, investment, government purchases, and net exports. That's correct! The expenditure approach focuses on these components to calculate GDP.
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Camellia
2 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
16 days ago
Bulah: Nope, it's C. Don't worry, it can be confusing sometimes.
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Bulah
17 days ago
User 2: Really? I thought it was D) Consumption, investment, government purchases, and foreign exchange.
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Shayne
2 months ago
User 1: It's actually C) Consumption, investment, government purchases, and net exports.
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Barrie
2 months ago
C) Consumption, investment, government purchases, and net exports. This is the correct answer as per the expenditure approach to calculating GDP.
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Eleonora
28 days ago
So, GDP is the sum of consumption, investment, government purchases, and net exports.
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Malcolm
29 days ago
That's right! The expenditure approach to calculating GDP includes those components.
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Quiana
2 months ago
I think the correct answer is C) Consumption, investment, government purchases, and net exports.
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Kenny
3 months ago
I'm not sure, but C seems to be the most logical choice based on the components of GDP.
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Francene
3 months ago
I agree with Aleta, C makes sense because it includes government purchases and net exports.
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Aleta
3 months ago
I think the answer is C.
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