Suppose a Nation's 2010 Nominal GDP Was $972 Billion and the General

question 120

Multiple Choice

Suppose a nation's 2010 nominal GDP was $972 billion and the general price index was 90.To make the 2010 GDP comparable with the base year GDP, the 2010 GDP must be

• A)deflated to $678 billion.
• B)deflated to $896 billion.
• C)inflated to $1,080 billion.
• D)deflated to $1,080 billion.

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Definitions:

Exchange Rates

The rate at which one currency can be exchanged for another, a key factor affecting international business and finance.

Depreciation Expense

Depreciation Expense represents the systematic allocation of the cost of a tangible asset over its useful life, reflecting the usage and wear and tear of the asset.

Functional Currency

The primary currency of the primary economic environment in which an entity operates, usually used in preparing financial statements.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, leading to its net profit or loss.