Suppose That Both Nominal GDP and Prices Double

question 144

Multiple Choice

Suppose that both nominal GDP and prices double. We can conclude that real output:

• A)more than doubled.
• B)doubled.
• C)remained constant.
• D)fell.

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Definitions:

Tax Liability

The total amount of tax owed to a tax authority by an individual or corporation after all deductions, credits, and exemptions.

Income Tax Withholdings

The portion of an employee's income that is withheld by the employer and paid directly to the government as a prepayment of income tax.

Income Tax Regulation

Legal guidelines and rules governing how income taxes are calculated, collected, and enforced by authorities.

Reg.§1.162-1

A reference to a section of the U.S. Tax Code outlining the deduction of ordinary and necessary business expenses.