Final answer:
The economic variable most closely associated with increasing corporate profits is gross domestic product (GDP). Exchange rates and inflation can also have an impact, but the relationship is more complex. The correct answer is option C. Gross domestic product
Step-by-step explanation:
The economic variable most closely associated with increasing corporate profits is Gross domestic product (GDP). GDP measures the total value of goods and services produced within a country's borders, and it is often used as an indicator of the overall health and growth of an economy. When the GDP of a country is growing, it generally indicates increased consumer spending and business investment, which can lead to higher corporate profits.
Exchange rates and inflation can also have an impact on corporate profits, but they are not as directly linked as GDP. Exchange rates can affect the competitiveness of exports and imports, while inflation can erode the purchasing power of consumers and increase production costs for businesses. However, the relationship between these variables and corporate profits can be complex and dependent on various factors.
(Keywords: Gross domestic product, GDP, Exchange rates, Inflation, Corporate profits)