Suppose That Nominal GDP Increased by 3 Percent,but the Real

question 260

Multiple Choice

Suppose that nominal GDP increased by 3 percent,but the real GDP increased by only 1 percent during that same period.Which of the following best explains the phenomenon?

• A)Prices increased by approximately 1 percent.
• B)Prices increased by approximately 2 percent.
• C)Prices increased by approximately 3 percent.
• D)Prices increased by approximately 4 percent.

---

Definitions:

Receivables Turnover

A financial metric indicating how often a company collects its average accounts receivable within a certain period, measuring the efficiency of credit sales collection.

Profit Margins

A financial metric used to evaluate a company's financial health by revealing the percentage of revenue that exceeds the costs of goods sold.

Days' Sales

A financial metric that measures the average number of days it takes a company to convert its inventory into sales.

Long-Term Solvency Ratios

Financial metrics used to assess a company's ability to meet its long-term financial obligations.