Suppose Smith Pays $100 to Jones

question 159

Multiple Choice

Suppose Smith pays $100 to Jones.

• A) We can say with certainty that the GDP has increased by $100.
• B) We can say with certainty that the GDP has increased, but we cannot determine the amount.
• C) We can say with certainty that the nominal GDP has increased, but we can't say whether real GDP has increased or decreased.
• D) We need more information to determine whether GDP has changed.

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Definitions:

Operating Cash Flow

Operating cash flow is the money generated from a company's regular business operations, highlighting its capacity to sustain and grow operations.

Fixed Cost

Overhead expenses that remain constant regardless of the volume of goods or services produced by a business.

Sales Commissions

A form of payment to a salesperson for services rendered, which is often calculated as a percentage of the sales they have generated.

Chief Financial Officer

The senior executive responsible for managing the financial actions of a company, including financial planning, management of financial risks, and financial reporting.