When Computing Economic Growth,changes in Nominal Gross Domestic Product (GDP)must

question 132

Multiple Choice

When computing economic growth,changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because

• A) prices are nearly impossible to measure by government economists.
• B) an increase in prices will decrease nominal GDP without any actual economic growth.
• C) an increase in prices will increase nominal GDP without any actual economic growth.
• D) changes in prices are primarily determined by the government.
• E) changes in prices are largely irrelevant for consumers.

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Definitions:

Return on Equity

A financial ratio measuring the profitability of a business in relation to the equity held by the shareholders.

Asset Turnover

A ratio determining the efficacy of a company's asset utilization in creating sales revenue.

Current Ratio

An indicator of a company's short-term financial health, determined by dividing its assets due within a year by its liabilities due in the same timeframe.

Net Working Capital

The discrepancy between a firm's immediate assets and its short-term obligations.