Which of the Following Statements About Nominal GDP and Real

question 14

Multiple Choice

Which of the following statements about nominal GDP and real GDP is correct?

• A)Nominal GDP is a better gauge of economic well-being than real GDP.
• B)Real GDP is a better gauge of economic well-being than nominal GDP.
• C)Real GDP and nominal GDP are equally good measures of economic well-being.
• D)Neither nominal nor real GDP provide a measure of economic well-being.

---

Definitions:

GAAP

Generally Accepted Accounting Principles, a common set of accounting rules and standards used in the United States for preparing financial statements.

Variable Costs

Costs that vary directly with the level of production or sales volume.

Production Level

The quantity of goods or services produced within a specified period by a company, factory, or manufacturing plant.

Direct Labor

The cost associated with workers who are directly involved in the production of goods or services.