Suppose the Real GDP Equals $100 Billion This Year and Nominal

question 131

Multiple Choice

Suppose the real GDP equals $100 billion this year and nominal GDP is $200 billion.How much has the price level increased since the base year?  

• A) 0 percent 
• B) 50 percent 
• C) 100 percent 
• D) 200 percent

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Definitions:

Contra-Asset

An asset account where the balance is expected to be a debit balance but is instead a credit balance, such as accumulated depreciation.

Worksheet

A spreadsheet used by accountants to prepare adjusting entries, financial statements, and to ensure the accounts balance before closing.

Accountant

A professional who performs accounting functions such as audits or financial statement analysis and is proficient in financial reporting and regulation.

Depreciation Expense

The method of distributing the expense of a physical asset across its serviceable duration, accounting for depreciation or becoming outdated.