The Fact That Nominal GDP Has Risen Faster Than Real

question 238

Multiple Choice

The fact that nominal GDP has risen faster than real GDP

• A) suggests that the base year of the GDP price index has been shifted.
• B) tells us nothing about what has happened to the price level.
• C) suggests that the general price level has fallen.
• D) suggests that the general price level has risen.

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Definitions:

Variable Production Costs

Costs that change in proportion to the level of production output, such as raw materials and direct labor.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Revenue

Revenue is the total amount of income generated by the sale of goods or services related to a company's primary operations.

Incremental Cost

The additional cost incurred from producing or purchasing one more unit of a product or service.