The Reporter on One Broadcast Network Says 2011 GDP Increased

question 75

Multiple Choice

The reporter on one broadcast network says 2011 GDP increased to an all-time high. Commenting on the same figure, a second reporter says GDP in 2011 was less than in 2010. Which of the following explanations is consistent with the statements of both reporters?

• A) The first reporter was referring to real GDP, and the second was referring to nominal GDP.
• B) The first reporter was referring to nominal GDP, and the second was referring to real GDP.
• C) The first reporter was referring to GDP as measured by the expenditure approach, and the second was referring to GDP as measured by the income cost approach.
• D) The first reporter was referring to GDP as measured by the income cost approach, and the second was referring to GDP as measured by the expenditure approach.

---

Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to adjust the income and expenditure records for accuracies in financial reporting.

Financial Statements

Reports that provide detailed information about a company's financial position and performance, including the balance sheet, income statement, and cash flow statement.

Accounting System

A systematic arrangement of both manual and automated accounting processes, techniques, and safeguards designed to collect, document, categorize, scrutinize, condense, elucidate, and convey precise and up-to-date financial information.

Supplies Account

An account that tracks the cost of supplies on hand and consumed by a business, which can be adjusted through adjusting entries for accurate financial reporting.