If Nominal or Money GDP Increases 6 Percent in 2011

question 94

Multiple Choice

If nominal or money GDP increases 6 percent in 2011 (compared to 2010) , and real GDP increases 4 percent over the same period, which of the following must be true?

• A) Exports exceeded imports.
• B) The general price level as measured by the GDP deflator fell during 2011.
• C) The economy entered a recession in 2011.
• D) Inflation during 2011 was 2 percent.

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Definitions:

Recorded

The process of making an official or formal documentation of a particular data or event in accounting or records.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the appropriate period.

Unearned Service Revenue

Income received by a company for services yet to be performed, considered a liability until the service is delivered.

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Professional services offered by qualified attorneys or lawyers that include legal advice, representation in court, and other activities related to the practice of law.