The GDP Deflator Is Designed to Adjust Nominal GDP

question 155

Multiple Choice

The GDP deflator is designed to adjust nominal GDP

• A) for changes in the unemployment rate.
• B) for changes in prices.
• C) for problems that arise because of externalities.
• D) for changes in interest rates.

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Definitions:

Statement of Operations

A financial report detailing a company's revenues, expenses, and profits over a specific period, also known as an income statement.

Revenues

Income earned from normal business operations and other activities, often reflected at the top of an income statement.

Financing Activities

Transactions and events where a business either raises funds from financial markets or repays funds previously raised; includes issuance or repurchase of equity and debt.

Cash Flow Statement

The cash flow statement is a financial document that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking the analysis down to operating, investing, and financing activities.