Final answer:
The correct answer is C. Depreciation of real property under MACRS uses the MACRS method with a half-year convention in the first year. Real GDP changes are measured quarterly and reported as an annualized rate by multiplying the quarterly growth by four.
Step-by-step explanation:
When depreciating real property under MACRS, the correct recovery method is the Modified Accelerated Cost Recovery System (MACRS); Half-year. MACRS is the tax depreciation system used in the United States, and it allows for accelerated depreciation of assets. Under this system, most business and investment property placed in service after 1986 is depreciated using MACRS. An important feature to note is that MACRS applies a half-year convention for the first year, which assumes that the property is in service for half of the year, regardless of when it was actually placed in service during the year. This affects the first year's depreciation calculation, meaning that only half of the normal annual depreciation is applied.
Tracking changes in the real GDP over time is essential for understanding economic growth. This is measured on a quarterly basis, and by convention, reported at an annualized rate. If news reports state that 'the economy grew 1.2% in the first quarter,' this refers to the quarterly percentage change in real GDP multiplied by four to project an annual growth rate, assuming the same rate of growth continues for the full year.