Which of the Following Statements Correctly Highlights a Difference Between

question 201

Multiple Choice

Which of the following statements correctly highlights a difference between real GDP and nominal GDP?

• A) Real GDP includes the value of goods and services produced by foreign firms, while nominal GDP does not include the value of goods and services produced by foreign firms.
• B) Real GDP includes the value of goods and services produced by domestic firms in foreign countries, while nominal GDP does not include the value of goods and services produced by domestic firms in foreign countries.
• C) Real GDP strips out the effect of changing prices on the value of goods and services produced, while nominal GDP does not strip out the effect of changing prices on the value of goods and services produced.
• D) Real GDP does not take into account the value of goods and services provided, while nominal GDP takes these into account.

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Definitions:

FIFO

First-In, First-Out, an inventory valuation method where goods produced or acquired first are sold, used, or disposed of first.

Merchandise inventory

The goods and products that a retailer, wholesaler, or distributor has in stock and available for sale to customers.

Ending cost

This is likely intended to refer to the ending inventory cost, which is the value of goods available for sale at the end of an accounting period.

FIFO

First In, First Out; an inventory valuation method where the oldest inventory items are recorded as sold first.