The Chain- Weighted Output Index Method of Calculating Real GDP

question 60

Multiple Choice

The chain- weighted output index method of calculating real GDP compares

• A) compares the quantities of goods produced in consecutive years using prices in both years and averaging the percentage changes in the value of output.
• B) prices at different points in time using a sample of goods that is representative of goods purchased by households.
• C) quantities produced in different years with the prices that prevailed during the year in which the output was produced.
• D) quantities produced in different years using prices from a year chosen as a reference period.

---

Definitions:

Cash Coverage Ratio

A liquidity ratio that measures a company’s ability to pay off its debt with cash and cash equivalents, indicating financial health.

Operating Activities

The section of a company's cash flow statement that reveals the cash generated or used in the company’s primary business operations.

Interest Expense

The expense an entity faces for using borrowed capital over a specific time frame.

Inventory Turnover

A financial ratio that measures how often a company's inventory is sold and replaced over a specific period.