If Nominal GDP Increased from $5,000 Billion in 2003 to $5,500

question 171

Multiple Choice

If nominal GDP increased from $5,000 billion in 2003 to $5,500 billion in 2004 and the GDP deflator increased from 130 to 140 over the same time period, what would the 2004 real GDP equal expressed in terms of 2003 dollars?

• A)$4,643 billion
• B)$5,107 billion
• C)$5,385 billion
• D)$5,500 billion
• E)$5,923 billion

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Definitions:

Journal Entry

A record in accounting that signifies a transaction and affects the balance sheet and income statement.

Inventory Write-down

A reduction in the value of inventory to reflect its current market value below its listed cost.

Net Income

The net income of a company once all costs and taxes are deducted from the total earnings.

Inventory Valuation

The method used to assign cost or value to inventory, impacting how cost of goods sold and inventory are reported.