In the Base Year

question 106

Multiple Choice

In the base year:

• A) nominal and real GDP are equal by definition.
• B) nominal GDP is always larger than real GDP because prices are held constant.
• C) real GDP is always larger than nominal GDP because prices are held constant.
• D) real GDP will only be larger than nominal GDP if prices increased in the base year.

---

Definitions:

EOM

End of Month; a term used in various financial and business arenas to describe actions that take place at or by the conclusion of a month.

Credit Period

The duration of time a buyer has to pay a supplier for purchases without incurring interest or penalties.

Perishable

A perishable item is one that has a limited lifespan and can deteriorate or expire, often food, flowers, or medicine.

Buyer's Inventory

The stock of goods a purchaser has on hand, which represents a current asset on the balance sheet that is intended for resale or use in production.