If Real GDP Falls from One Period to Another and the Price

question 16

Multiple Choice

If real GDP falls from one period to another and the price level stays the same,we can conclude that

• A)Nominal GDP increased.
• B)Inflation increased.
• C)Nominal GDP decreased.
• D)NDP decreaseD.Production must have fallen and so must have nominal GDP because the price level remained constant.

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Definitions:

Activity Variance

The difference between the budgeted costs based on expected activity levels and the actual costs incurred, usually used in flexible budgeting.

Net Operating Income

The income from a company's operations after deducting operating expenses, excluding revenue and expenses from non-operational activities.

Budgeting

The process of creating a plan to spend your money, outlining expected revenues and expenses.

Activity Variance

The difference between planned levels of activity and actual levels, often analyzed to improve budgeting and operational efficiency.