The Difference Between Nominal GDP and Real GDP Is

question 213

Multiple Choice

The difference between nominal GDP and real GDP is

• A)the indirect taxes used in their calculations.
• B)the prices used in their calculations.
• C)that nominal GDP includes the depreciation of capital and real GDP does not.
• D)that nominal GDP includes net exports of goods and services and real GDP includes net imports.
• E)that real GDP includes the depreciation of capital and nominal GDP does not.

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Definitions:

Net Income

Profit calculated as the difference between total revenues and total expenses, indicating the financial performance of a company over a period.

General Ledger

A complete record of all financial transactions over the life of a company, used to compile the financial statements.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments are made for accruals, deferrals, and other adjustments.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts in preparation for the next accounting period.