Milton Friedman in His Book on Consumption Function, Discussed the Importance

question 95

Multiple Choice

Milton Friedman in his book on consumption function, discussed the importance of _____, rather than _____, to understand consumer spending.

• A)savings;expenditure
• B)permanent income;current income
• C)money supply;real output
• D)wages;savings
• E)real output;prices

Calculate real GDP from nominal GDP data using the GDP deflator.

Analyze economic growth or decline using real GDP data.

Understand and calculate the impact of price changes on nominal and real GDP.

Understand how to calculate percentage changes in GDP using real GDP and the GDP deflator.

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Definitions:

Periodic Inventory System

An accounting method where inventory is physically counted at specific intervals to determine the level of inventory and cost of goods sold.

Perpetual Inventory System

An inventory accounting system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Statement Of Financial Position

A balance sheet is a financial statement that outlines a company's equity, liabilities, and assets at a certain date.

Inventory

Goods and materials that a business holds for the ultimate goal of resale or processing.