Figure 10-4 ​

question 211

Multiple Choice

Figure 10-4
​
-A recessionary gap exists when

• A)real GDP exceeds nominal GDP.
• B)nominal GDP exceeds real GDP.
• C)real GDP exceeds potential GDP.
• D)potential GDP exceeds real GDP.

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Definitions:

Par Value

The face value of a stock or bond as designated by the issuer, which has little relation to its market value but is important for accounting purposes.

Investing Activities

Financial activities related to the acquisition or sale of long-term assets and investments.

Bonds Payable

Long-term debt securities issued by a corporation or government entity, promising to pay the holder a specified amount of interest over a specified period and to repay the principal at maturity.

Net Cash

The amount of cash after subtracting cash outflows from cash inflows.