When Real GDP Growth Exceeds Nominal GDP Growth

question 18

Multiple Choice

When real GDP growth exceeds nominal GDP growth,

• A) inflation is increasing.
• B) inflation is decreasing.
• C) unemployment is decreasing.
• D) the price level is decreasing.
• E) none of the above.

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Definitions:

ROA

Return on Assets, an indicator of how profitable a company is relative to its total assets, illustrating how efficiently a company is using its assets to generate earnings.

DSO

Days Sales Outstanding refers to the average period a company requires to receive payment following a sale.

Debt Ratio

A financial ratio that measures the extent of a company's or individual's leverage, calculated by dividing total liabilities by total assets.

Rational Individual

Refers to a person who makes choices that maximize their personal benefit or utility, based on their own preferences and available information.