If Both Aggregate Output and the Aggregate Price Level Increase

question 88

Multiple Choice

If both aggregate output and the aggregate price level increase:

• A)real GDP will increase faster than nominal GDP.
• B)nominal GDP will increase faster than real GDP.
• C)it makes no difference to real or nominal GDP.
• D)real GDP and nominal GDP will increase faster than the price level.

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Definitions:

Fixed Expenses

Costs that do not change with the volume of production or sales, such as rent, salaries, and insurance.

Merchandise Inventory

The total cost of all the goods that a retail company has available for sale at any given time.

Net Income

The total profits of a company after all expenses, including taxes and interest, have been deducted from total revenues.

Accounts Receivable

Accounts receivable represents money owed to a company by customers who have purchased goods or services on credit.