The Reference Base Year Is 2017

question 46

Multiple Choice

The reference base year is 2017. To calculate the chained- dollar real GDP in 2018 we calculate

• A)the value of the final goods and services produced in 2018 valued at the prices that prevailed in 2018.
• B)the value of final goods and services produced in the base year valued at the 2018 prices.
• C)the value of the final goods and services produced in 2018 valued at the prices that prevailed in the base year.
• D)the base- year GDP and add the average of the increases in real GDP calculated using 2017 prices and 2018 prices.
• E)nominal GDP in 2018 multiplied by price level.

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Definitions:

Investing Activity

Financial transactions involving the purchase or sale of long-term assets and investments.

Financing Activity

Transactions involving the flow of cash between a company and its investors and creditors, related to equity and debt.

Noncash Investing

Transactions that involve the acquisition or disposal of assets not involving immediate cash flow.

Indirect Method

A method used in cash flow statements to calculate net cash flow from operating activities by adjusting net income for changes in non-cash accounts like accounts receivable, accounts payable, and depreciation.