Historically, Real GDP Has Increased Less Rapidly Than Nominal GDP

question 22

Multiple Choice

Historically, real GDP has increased less rapidly than nominal GDP because:

• A)price indices have not reflected improvements in product quality.
• B)the general price level has increased.
• C)technological progress has resulted in more efficient production.
• D)the general price level has declined.

---

Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in the level of activity or volume of production.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, maintenance, and salaries of production supervisors, not directly tied to the production of an individual product.

Spending Variance

The difference between the budgeted or standard cost of something and its actual cost, often analyzed in budgeting and cost control.

Units

The measures or quantities of a product, service, or resource, which are accounted for in business transactions.