Economists Do Not Use Actual Values of Real GDP to Measure

question 8

Multiple Choice

Economists do not use actual values of real GDP to measure economic growth because

• A) real GDP holds price level constant, but in reality price level changes from year to year.
• B) changes in real GDP could be due to fluctuations in the level of economic activity.
• C) economic growth encompasses more than just growth in output.
• D) changes in real GDP do not provide any information about income distribution.

---

Definitions:

Presentation Currency

The currency in which financial statements are presented. This may differ from the functional currency in which transactions are recorded.

Accounts Receivable

Money owed to a company by its debtors for goods sold or services rendered on credit.

AASB 121

Specifies the requirements for accounting for foreign exchange rates and their effects on foreign currency transactions, including translation of foreign currency financial statements into the entity's presentation currency.

Presentation Currency

The currency in which the financial statements of an entity are presented.