What Would Explain a Rise in Nominal GDP but a Drop

question 114

Multiple Choice

What would explain a rise in nominal GDP but a drop in real GDP during the same period?

• A)a rise in prices and a fall in production.
• B)a fall in prices and a rise in production.
• C)a rise in prices and a rise in production.
• D)a fall in prices and a fall in production.
• E)constant prices and a fall in production.

---

Definitions:

Schedule M-1

A form used by corporations filing U.S. federal corporate income taxes to reconcile financial statement income with tax return income.

Total Receipts

The total amount of money received by a business during a specific period, including sales, income, donations, and other forms of revenue.

Subchapter S Corporation

A type of corporation that meets specific Internal Revenue Code requirements and passes income, losses, deductions, and credits to its shareholders for federal tax purposes.

C Corporation

A legal structure for a corporation in which the owners, or shareholders, are taxed separately from the entity, leading to potential double taxation on earnings.