If Nominal GDP Is $12 Trillion and Real GDP Is

question 41

Multiple Choice

If nominal GDP is $12 trillion and real GDP is $10 trillion,then the GDP deflator is

• A)83.33,and this indicates that the price level has decreased by 16.67 percent since the base year.
• B)83.33,and this indicates that the price level has increased by 83.33 percent since the base year.
• C)120,and this indicates that the price level has increased by 20 percent since the base year.
• D)120,and this indicates that the price level has increased by 120 percent since the base year.

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Definitions:

Annual Dividend

The total dividend payment a shareholder receives from a company over the course of a year, often expressed as a per share amount.

Flotation Cost

Flotation cost is the total cost incurred by a company in offering its securities to the public for sale, including underwriting, legal, and registration fees.

Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Component Cost

Component Cost is the rate of return expected by investors on a specific source of financing, such as debt or equity, contributing to the company's overall cost of capital.