University:
CFA Institute
Course:
CFA Level 2 - Economics
Academic year:

2023
Views:

11

Pages:

1
Author:

anon

CFA Level 2 - Economics Session 4 - Reading 20 Measuring Economic Activity-LOS b (Practice Questions, Sample Questions) LOS b: Differentiate between GDP at market prices and GDP at factor cost. 1. The modification of Gross Domestic Product (GDP) to reflect indirect taxes and subsidies is called the: A) GDP deflator. B) factor cost adjustment. (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.) C) gross national income (GNI). 2. For which of the following is gross domestic product (GDP) adjusted to calculate GDP at factor cost? A) A value-added tax. (Factor cost adjustments to GDP include indirect taxes (such as a value-added tax) and subsidies.) B) Self-employment income. C) Rental income.