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Macroeconomics

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Moderate

Definition of Gross Domestic Product (GDP)

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Below is a recent quote from a popular political candidate regarding economic activity in America:

“… last quarter it was announced that our Gross Domestic Product (GDP) was below zero …”.

Which statement below is correct in reference to this quote?

A

It is true and happens frequently as a result of shifts in aggregate supply and demand.

B

It is false as the politician mistakenly confused the level of GDP with the growth of GDP.

C

It is false as the politician mistakenly believed that GDP cannot be measured on a quarterly basis.

D

It is true as a result of rapid inflation in the American economy over recent decades.