From One Year to the Next Suppose GDP Rises and the GDP

question 328

Multiple Choice

From one year to the next suppose GDP rises and the GDP deflator falls between those years.

• A)Real GDP must have fallen.
• B)Real GDP must have risen.
• C)Real GDP must have remained the same.
• D)There is not enough information to determine whether real GDP rose,fell,or remained the same.

---

Definitions:

Endowment Fund

A financial endowment given to institutions like universities, museums, and non-profits to invest and use the annual income from investments for operations or programs.

Perpetuity

A financial instrument that pays a steady, never-ending stream of cash flows to the investor.

Compounded Semi-Annually

A method where interest is added to the principal balance of an investment or loan twice a year, leading to compound growth.

Trust Fund

A legal entity that holds and manages assets on behalf of another, guided by the terms set forth in a trust agreement.