The Difference Between Nominal GDP and Real GDP Is

question 213

Multiple Choice

The difference between nominal GDP and real GDP is

• A)the indirect taxes used in their calculations.
• B)the prices used in their calculations.
• C)that nominal GDP includes the depreciation of capital and real GDP does not.
• D)that nominal GDP includes net exports of goods and services and real GDP includes net imports.
• E)that real GDP includes the depreciation of capital and nominal GDP does not.

---

Definitions:

Weighted-Average Method

A method in cost accounting used to average costs and quantities over a specific period, often applied in inventory valuation and costing of goods sold.

Process Costing

A costing system used where identical or similar products are mass-produced, allocating costs over the units produced during a period.

Conversion Costs

The combined costs of direct labor and manufacturing overhead incurred to transform raw materials into finished goods.

Processing Department

A division within a company where raw materials are transformed into finished products through a series of operations or processes.