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:

Labor Rate Variance

The difference between the actual cost of direct labor and the standard cost, indicating how well the company is managing its labor costs.

Direct Labor Standards

The expected amount of time and wage rate for workers to complete a unit of production.

Labor Efficiency Variance

A measure of the difference between the actual hours worked and the standard hours expected to produce a certain level of output.

Standard Cost System

An accounting method that uses cost estimates for labor, materials, and overhead to assign costs to products, facilitating variance analysis between expected and actual costs.