The Base Year Refers to the Year Whose

question 47

Multiple Choice

The base year refers to the year whose:

• A) prices are used to calculate real GDP for all years.
• B) levels of output are used to calculate the real GDP for all years.
• C) prices are used to calculate nominal GDP for all years.
• D) levels of output are used to calculate the nominal GDP for all years.

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Definitions:

Work in Process

Inventory that includes partially completed goods that are in the process of being manufactured but are not yet finished products.

Finished Goods

Products that have completed the manufacturing process and are ready for sale.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor expenses.

Machine-hours

A measure of the amount of time machines are operated, used in allocating overhead costs.