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A Country Reported a Nominal GDP of $100 Billion in 2012

question 32

Multiple Choice

A country reported a nominal GDP of $100 billion in 2012 and $75 billion in 2011 and reported a GDP deflator of 125 in 2012 and 120 in 2011.What happened to real output and prices from 2011 to 2012?


Definitions:

Federal Spending

Refers to the total amount of money the federal government expends on various programs, services, and debt interest.

Ability-To-Pay Principle

A tax principle that states taxes should be levied based on the taxpayer’s ability to pay, meaning higher-income individuals should pay more in taxes than lower-income individuals.

Government Employment

Employment within governmental bodies, including all levels from local to federal.

Labor Force

The sum of individuals in the workforce, comprising both those who are employed and those who are actively looking for work.

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