If real GDP rises and the GDP price index has increased,
A) the percentage increase in nominal GDP must have been less than the percentage increase in the price level.
B) nominal GDP may have either increased or decreased.
C) nominal GDP must have increased.
D) nominal GDP must have fallen.

Question

Quizplus · Accepted Answer

If real GDP rises and the GDP price index has increased, it means that prices have gone up while production has also increased. This implies that nominal GDP must have also increased. Therefore, the correct answer is C - nominal GDP must have increased.

If Real GDP Rises and the GDP Price Index Has