Suppose That in 2010 Canada's Automobile Manufacturers Produced 2 Million

question 55

Multiple Choice

Suppose that in 2010 Canada's automobile manufacturers produced 2 million cars priced at $20 000 each. And in 2011 they produced 1 million cars priced at $40 000 each. Ceteris paribus, the change in nominal national income is

• A)an increase because the price of each car increased.
• B)a decrease because fewer cars were produced.
• C)insufficient information to know.
• D)no change in nominal national income.
• E)an increase because of inflation.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, usually derived from profits.

Outstanding Voting Common Stock

The shares of a company held by shareholders that are entitled to vote and are not held by the company itself.

Amortization

The process of gradually writing off the initial cost of an asset over a period, typically for intangible assets.

Inventory Costing

An accounting method used to value inventory, commonly involving First-In, First-Out (FIFO), Last-In, First-Out (LIFO), or weighted average cost methods.