Nominal GDP Increases

question 29

Multiple Choice

Nominal GDP increases

• A)only if total production increases.
• B)only if prices increase.
• C)if either prices and/or total production increase.
• D)only if the productivity of resources increase.
• E)only if depreciation decreases.

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Definitions:

Accounting Principles

The standardized rules and guidelines under which financial statements are prepared, widely known as Generally Accepted Accounting Principles (GAAP).

Financial Covenants

Conditions set by lenders in loan agreements that the borrower must adhere to, designed to maintain the borrower's financial stability and safeguard the loan repayment.

Accounting Changes

Adjustments made to the accounting methods, estimates, or reporting entities of a firm, which must be disclosed to stakeholders to ensure transparency.

Discretionary Accruals

Accounting adjustments made by management's judgment, often to smooth out earnings or manipulate financial statements.