If Nominal GDP Increased by 11 Percent During a Year

question 29

Multiple Choice

If nominal GDP increased by 11 percent during a year while real GDP increased by only 5 percent, then the

• A)price level decreased by 6 percent.
• B)price level increased by 16 percent.
• C)price level remained steady but real output fell by 6 percent.
• D)unemployment rate fell during the year.
• E)price level increased by 6 percent.

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Definitions:

Ending Inventory

Ending inventory is the total value of goods remaining in stock at the end of an accounting period, used to calculate cost of goods sold and gross profit.

Ending Inventory

The ultimate worth of merchandise up for sale at the termination of a fiscal period.

Overstated

A situation where the reported value or figures are higher than the true or accurate value, often unintentionally.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor.