Suppose That Nominal GDP Did Not Change in 2011, and Real

question 137

Multiple Choice

Suppose that nominal GDP did not change in 2011, and real GDP decreased, relative to the year 2010. It can be concluded that:

• A)​total production of goods and services in the economy did not change in 2011.
• B)​the economy experienced deflation during 2011.
• C)​the price level did not change during 2011.
• D)​total production of goods and services in the economy declined during 2011.

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Definitions:

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that is globally recognized for financial reporting.

One-transaction Approach

A fiscal approach viewing an intercompany transaction as a singular event affecting consolidated financial statements, without recognizing it in individual accounts.

Two-transaction Approach

An accounting method where a transaction is considered to involve two separate events that are recorded independently.

Two-transaction Theory

A concept in accounting that proposes a business transaction affects two or more accounts in the ledger, which is fundamental to the double-entry bookkeeping system.