A Country Reported a Nominal GDP of $85 Billion in 2007

question 57

Multiple Choice

A country reported a nominal GDP of $85 billion in 2007 and $100 billion in 2006, and reported a GDP deflator of 100 in 2007 and 105 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 and prices both fell.
• D)Real output fell and prices rose.

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Definitions:

Purchase Discount

A deduction from the amount owed by a buyer to a seller, granted for paying an invoice early.

Early Payment Discount

This is a reduction in the invoice amount offered by a seller to a buyer in return for paying the bill before the scheduled due date.

Sales Discount

A reduction in the price of a product or service that is offered to customers, typically to encourage early payment of invoices or to incentivize bulk purchases.

FOB Destination

A shipping term indicating that the seller bears shipping costs and retains ownership of goods until they are delivered to the buyer's location.