Table 8-20 2016 2018

question 141

Essay

Table 8-20
2016 2018

-Refer to Table 8-20.Consider the following data for a simple economy: Calculate nominal GDP and real GDP for 2018,using 2016 as the base year.Show your work.

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Definitions:

Variable Expenses

Costs that change in proportion to the activity or volume of operations in a business, such as raw materials and labor costs.

Fixed Expenses

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance premiums.

Contribution Margin Ratio

The proportion of sales revenue that exceeds variable costs, indicating how much revenue contributes to fixed costs and profit.

Margin of Safety Percentage

A financial ratio indicating the difference between actual sales and break-even sales, used to determine the risk of incurring a loss.