Suppose That the Base Year Is 2015, and the GDP

question 53

Multiple Choice

Suppose that the base year is 2015, and the GDP price index in 2014 is 92.0.This implies that the

• A)output in 2015 was higher than in 2014.
• B)prices in 2015 were higher than in 2014.
• C)output in 2015 was lower than in 2014.
• D)prices in 2015 were lower than in 2014.

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Definitions:

Gross Profit

Gross profit is the financial measure calculated by subtracting the cost of goods sold from revenue, indicating the efficiency in production and pricing.

LIFO Method

An inventory valuation method that assumes the last items placed in inventory are the first sold, known as Last-In, First-Out.

FIFO Method

A method of inventory valuation where the first items purchased are the first ones to be sold, standing for First In, First Out.

Inventory Valuation

The method or process by which the total value of a company's inventory is determined, based on the cost of goods, market value, or an agreed-upon valuation mechanism.