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

question 92

Multiple Choice

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

• A) if real GDP remains the same,an increase in the population actually means a lower average standards of living.
• B) an increase in population will tend to reduce nominal GDP.
• C) changes in population tend to have no effect on standards of living.
• D) if real GDP remains the same,an increase in the population actually means a raised average standards of living.
• E) an increase in the population will tend to decrease average prices.

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Definitions:

Retention of Earnings

The portion of net income that is retained by a company rather than distributed to its shareholders as dividends, often used for reinvestment.

Common Stock

Equity ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends or stock appreciation.

Consumption Tax

A tax on the purchase of goods or services, levied at the point of sale.

Ad Valorem Tax

A tax based on the assessed value of an item, such as real estate or personal property, commonly used in property taxes.