Real GDP and Nominal GDP Differ Because the Real GDP

question 184

Multiple Choice

Real GDP and nominal GDP differ because the real GDP:

• A)is adjusted for changes in the volume of intermediate transactions.
• B)includes the economic effects of international trade.
• C)has been adjusted for changes in the price level.
• D)excludes depreciation charges.

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Definitions:

Variable Costs

Costs that change in proportion to the level of output or activity.

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, including expenses like lease payments, wages, and debt repayments.

Total Fixed Costs

The sum of all costs required to produce any amount of a product that does not change with the level of production.

Variable Costs

Costs that vary directly with the level of production or output, such as raw materials and labor.