Real GDP Equals Nominal GDP

question 56

Multiple Choice

Real GDP equals nominal GDP

• A) minus exports.
• B) corrected for changes in the price level.
• C) minus personal income taxes.
• D) minus retail sales taxes.

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Definitions:

Consumption Function

An economic formula that expresses the relationship between total consumption and gross national income.

Price Level

An index that measures the average of prices for goods and services in an economy over a period, often used to assess inflation or deflation.

Disposable Income

The leftover money for households to use in savings and for buying things, once income taxes have been considered.

Consumption Function

An economic formula that represents the relationship between total consumption and gross national income, indicating how changes in income affect spending.