According to the BEA, in the Second Quarter of 2012

question 375

Multiple Choice

According to the BEA, in the second quarter of 2012 nominal GDP rose by 3.3 percent and real GDP rose by 1.7 percent. The difference between the change in nominal GDP and the change in real GDP could be explained by

• A) an increase in prices of final goods and services produced.
• B) a decrease in prices of final goods and services produced.
• C) an increase in quantity of final goods and services produced.
• D) a decrease in quantity of final goods and services produced.

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Definitions:

Marginal Product

The supplementary yield achieved by the utilization of one additional unit of a variable factor, with all other resources remaining fixed.

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent or salaries, over a relevant period.

Variable Cost

Refers to expenses that vary directly with the level of production or output, such as raw materials and labor costs.

Total Cost

The full price of manufacturing that incorporates both stable and changing expenses.