Nominal GDP has risen faster than real GDP in the last decade because:
A)the price level has increased.
B)the price level has decreased.
C)the growth rate of productivity has accelerated.
D)the volume of foreign trade has expanded sharply.

Question

Nominal GDP has risen faster than real GDP in the last decade because:
A)​the price level has increased.
B)​the price level has decreased.
C)​the growth rate of productivity has accelerated.
D)​the volume of foreign trade has expanded sharply.

Quizplus · Accepted Answer

Nominal GDP measures the value of goods and services produced during a specific period at current prices, while real GDP measures the value of goods and services produced during a specific period at constant prices. Therefore, if nominal GDP rises faster than real GDP, it is because prices have increased, which is reflected in nominal GDP but not in real GDP. This suggests that inflation has occurred, leading to an increase in the price level.

Nominal GDP Has Risen Faster Than Real GDP in the Last