Why Is It Important to Use Real GDP Rather Than

question 23

Multiple Choice

Why is it important to use real GDP rather than nominal GDP figures when making comparisons of output across time periods?

• A) The real GDP figures are a better measure of changes in the general level of prices.
• B) The real figures will reflect changes in the quantity of output and not changes in the general level of prices.
• C) The real figures will reflect changes in the general level of prices as well as changes in the quantity of output.
• D) The real GDP figures adjust for changes in the level of employment.

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Definitions:

Common Stock Cash Dividend

A payment made to shareholders out of a company's earnings, specifically to common stockholders.

Treasury

Pertains to the management of an organization's revenues, expenditures, and investment strategies, often associated with government or corporate finance.

Authorized

Officially permitted or agreed upon, often referring to the maximum number of shares a corporation is legally allowed to issue.

Outstanding

Refers to shares that are currently owned by investors, including those held by public investors, institutional investors, and company insiders.