A Disadvantage of Chain-Weighting Is That

question 36

Multiple Choice

A disadvantage of chain-weighting is that

• A)past inflation rates change whenever the base year changes.
• B)past growth rates of real GDP change whenever the base year changes.
• C)it causes output growth to slow.
• D)the components of real GDP don't sum to real GDP.

---

Definitions:

Nonmonetary Assets

Assets that are not in the form of cash or cannot be quickly converted into cash, such as property, plant, and equipment.

Current Exchange Rate

The rate at which one currency can be exchanged for another at present.

Fair Value Method

The Fair Value Method is an accounting strategy used to value certain assets and liabilities at their current market worth, not based on purchase costs or book value.

Unrealized Gains

Profits that have been achieved on paper from an investment but have not yet been realized through a transaction.