The Measure of Production That Values Output Using Base-Year Prices

question 216

Multiple Choice

The measure of production that values output using base-year prices is called

• A)real GDP.
• B)nominal GDP.
• C)value-added GDP.
• D)underground GDP.

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits one could have received by taking the alternative action.

Forgone Interest

The potential interest earnings lost by choosing one investment over another or by keeping money in a non-interest-bearing account.

Economic Growth

The increase in the amount of goods and services produced by an economy over time, typically measured as the percent rate of increase in real gross domestic product (GDP).

Unemployment Rate

The level of the labor force that consists of individuals who are jobless but actively seeking employment.