Suppose We Switch the Base Year from 2000 to 2008

question 25

Multiple Choice

Suppose we switch the base year from 2000 to 2008.This change in the base year will cause

• A)nominal GDP in every year to increase.
• B)nominal GDP in every year to decrease.
• C)both nominal and real GDP in every year to decrease.
• D)real GDP in every year to decrease.
• E) none of the above

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Definitions:

Disbursement Float

The time between when a check is issued by a company and when the funds are actually removed from the company's bank account.

Cheques

Documents that order a bank to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued.

Collection Float

The time span between when a check is deposited and when the funds are actually available in the account, reflecting processing time.