If Both Real GDP and Nominal GDP of a Country

question 7

Multiple Choice

If both real GDP and nominal GDP of a country increased at the same rate in a particular year, which of the following is most likely to have taken place?

• A)Output increased and the price level increased
• B)Output increased and the price level decreased
• C)Output decreased and the price level increased
• D)Output decreased and the price level decreased
• E)Output increased and the price level remained constant

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Definitions:

Income from Operations

The profit realized from a business's ongoing operations, calculating the difference between revenues from operations and operational expenses.

Adjusting Entry

Journal entries made in accounting records at the end of an accounting period to update the balances of accounts.

Closing Entries

These are journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts.

Inventory

The complete quantity of products and materials a company possesses for the purposes of sale or utilization in manufacturing processes.