A GDP Deflator of 112 Means

question 25

Multiple Choice

A GDP deflator of 112 means:

• A) the overall price level is 12 percent higher than in the base year.
• B) the overall output increased by 12 percent since the base year.
• C) every price in the economy has gone up by 12 percent.
• D) the production of each good in the economy has increased by 12 percent.

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Definitions:

Investing Activity

Investing activity refers to the purchase or sale of long-term assets and investments, reflecting a company’s spending on acquiring and disposing of long-term assets.

Financing Activity

Transactions involving the flow of cash between a company and its owners, investors, or creditors, excluding operational and investing activities.

Statement of Cash Flows

A ledger statement which outlines how modifications in balance sheet accounts and revenue streams influence cash and cash equivalents, with the analysis broken down by operating, investing, and financing operations.

Parentheses

Punctuation marks used in writing to enclose additional information or clarify something without interrupting the main text.