A Country Reported a Nominal GDP of $100 Billion in 2007

question 41

Multiple Choice

A country reported a nominal GDP of $100 billion in 2007 and $75 billion in 2006, and reported a GDP deflator of 125 in 2007 and 120 in 2006. What happened to real output and prices from 2006 to 2007?

• A)Real output and prices both rose.
• B)Real output rose and prices fell.
• C)Real output fell and prices rose.
• D)Real output and prices both fell.

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Definitions:

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, often used for managing liquidity.

Budgeted Balance Sheet

A financial statement that projects a company’s financial position for a future period, based on anticipated assets, liabilities, and equity.

Production Budget

A production budget estimates the number of units that must be produced during a specific period to meet sales demands and inventory requirements.

Required Production Units

A calculation to determine how many units of a product need to be produced within a certain timeframe to meet customer demand and inventory levels.