If the DOL = 1

question 9

Multiple Choice

If the DOL = 1.05 and OCF rises from $10,000 to $12,500, the percentage change in sales = ?

• A) 18.6%
• B) 19.2%
• C) 22.3%
• D) 23.8%
• E) 26.2%

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Definitions:

GDP Deflator

A gauge for assessing the price rates of all new, locally manufactured, end goods and services in a country, applied to recalibrate nominal GDP to real GDP.

Real GDP

The measure of a country's economic output adjusted for price changes (inflation or deflation), providing a more accurate reflection of an economy's size and how it’s growing over time.

GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy, used to convert nominal GDP into real GDP.

Deflation

A decrease in the general price level of goods and services, often indicating reduced consumer demand or excess supply.