Real GDP Is Equivalent to

question 13

Multiple Choice

Real GDP is equivalent to

• A)the money value of all goods and services produced in an economy per year plus imports.
• B)the market value of all goods and services produced in an economy per year.
• C)personal disposable income plus depreciation.
• D)the value added of all goods and services produced in an economy per year adjusted for price changes.
• E)the nominal value of all goods and services in an economy per year.

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Definitions:

Nominal Rate

The interest rate stated on a financial product, not adjusted for inflation.

Effective Rate

The actual interest rate an investor earns or pays on an investment or loan, taking into account the effects of compounding.

Compounding Interval

The frequency at which interest is added to the principal amount of an investment or loan, influencing the total amount of interest earned or paid.

Compounded Semi-Annually

The calculation of interest on a principal sum twice a year, effectively increasing the amount on which future semi-annual interest payments are calculated.