The Difference Between Nominal GDP and Real GDP Is That

question 55

Multiple Choice

The difference between nominal GDP and real GDP is that nominal GDP:

• A) measures the total value of only final goods and services, whereas real GDP measures the value of all goods and services, both intermediate and final.
• B) measures a country's production of final goods and services at current market prices, whereas real GDP measures a country's production of final goods and services at the same prices in all years.
• C) is measured in dollar terms, whereas real GDP is measured in terms of numbers of goods and services produced.
• D) measures a country's production of final goods and services at fixed prices, whereas real GDP measures a country's production of all final goods and services at current market prices.

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Definitions:

Gross Profit

The difference between revenue and the cost of goods sold, indicating the profitability of a company's core activities.

Goods Available for Sale

The total quantity of goods that a company has in its stock ready to sell at the end of a financial period.

Absorption Costing

An accounting method that includes all manufacturing costs — direct materials, direct labor, and both variable and fixed overhead — in the cost of a product.

Variable Costing

A costing method that includes only variable production costs in product cost calculations, used for internal decision-making.