The GDP Deflator in Year 2 Is 105,using Year 1

question 89

Multiple Choice

The GDP deflator in year 2 is 105,using year 1 as the base year.This means that,on average,the cost of goods and services is

• A)5% higher in year 2 than in year 1.
• B)105% higher in year 2 than in year 1.
• C)5% higher in year 1 than in year 2.
• D)105% higher in year 1 than in year 2.

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Definitions:

Cash Management

The process of collecting, managing, and investing a company's cash flow in a way that maintains or increases the company's liquidity.

Temporary Excess Cash

Surplus cash not required for immediate operational or investment needs, often invested in short-term securities.

Invest

The act of allocating resources, usually money, in order to generate an income or profit.

Additional Staff

The employment of extra personnel beyond the current number to meet increased demands or to fulfill specific roles within an organization.