Suppose in Current Dollar Terms, GDP Increased by Approximately 7

question 95

Multiple Choice

Suppose in current dollar terms, GDP increased by approximately 7 percent between one period and the next, but real GDP fell by 2 percent. Which one of the following explanations is most likely?

• A)Prices fell by 9 percent.
• B)Prices fell by 2 percent.
• C)Output rose by 2 percent.
• D)Prices increased by 7 percent.
• E)Prices increased by 9 percent.

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Definitions:

Utility Bill

A regular invoice for essential services such as electricity, water, gas, or telecommunications provided to individuals or businesses.

Journal Entries

The record of financial transactions as they occur, detailing the accounts that are affected and in what way.

Receipt

A document acknowledging that a payment has been made or that goods have been received.

Supplies Expense

The cost associated with consumable items used during the process of operating a business, recorded as an operating expense on the income statement.