The GDP Deflator for Years Subsequent to the Base Year

question 44

Multiple Choice

The GDP deflator for years subsequent to the base year measures the change in

• A)nominal GDP from the base year that cannot be attributable to a change in real GDP.
• B)real GDP from the base year that cannot be attributable to a change in nominal GDP.
• C)nominal GDP from the base year that cannot be attributable to a change in prices.
• D)real GDP from the base year that cannot be attributable to a change in prices.

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Definitions:

Liquid

Describes an asset that can be quickly converted into cash without significant loss of value or a market where such assets can be bought or sold with ease.

Financial Intermediaries

Institutions that facilitate the channeling of funds between savers and borrowers by intermediating financial transactions.

Stocks

Financial instruments that signify ownership in a corporation and represent a claim on part of the corporation's assets and earnings.

Bonds

Bonds are debt securities issued by entities (such as governments, municipalities, or corporations) to raise funds, promising to repay the principal along with interest on a specified date.