A Country Reported Nominal GDP of $115 Billion in 2010

question 34

Multiple Choice

A country reported nominal GDP of $115 billion in 2010 and $125 billion in 2009.It also reported a GDP deflator of 85 in 2010 and 100 in 2009.Between 2009 and 2010,

• A)real output and the price level both rose.
• B)real output rose and the price level fell.
• C)real output fell and the price level rose.
• D)real output and the price level both fell.

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Definitions:

Social Security Tax

A mandatory payroll tax collected to fund the Social Security program, providing retirement, disability, and survivors' benefits.

Medicare Tax

A federal tax that funds the Medicare program, which is withheld from an employee's paycheck and also matched by the employer.

FICA Tax

A federal tax in the United States that funds Social Security and Medicare, contributed by both employees and employers.

Tax Withheld

The portion of an employee's income that an employer sends directly to the government as a payment of income taxes.