Real GDP Equals

question 35

Multiple Choice

Real GDP equals:

• A)trend real GDP plus the cyclical part of GDP
• B)trend real GDP times the cyclical part of GDP.
• C)trend real GDP less the cyclical part of GDP.
• D)trend real GDP divided by the cyclical part of GDP.

---

Definitions:

Accrual Basis Accounting

A financial recording system in which earnings and expenditures are logged when they happen, not necessarily when the payment is made or received.

Return on Assets

A financial ratio that measures how effectively a company is using its assets to generate profit, typically expressed as a percentage.

Debt Ratio

Debt ratio is a financial ratio that measures the extent of a company’s leverage, calculated by dividing total liabilities by total assets.

Profit Margin

A financial ratio that shows the percentage of revenue that exceeds the costs of goods sold, indicating the profitability of a business.