If over a period of time real gross domestic product (GDP)increases while nominal GDP decreases,then this implies
A) a significant rise in the price level.
B) a significant drop in the price level.
C) that real GDP is much less than nominal GDP.
D) that the given period occurs before the base period.
E) that the given period year occurs after the base period.

Question

Quizplus · Accepted Answer

If real GDP increases while nominal GDP decreases, it implies that the price level has dropped significantly, as real GDP is adjusted for inflation and reflects the actual increase in output, while nominal GDP is not adjusted for inflation and reflects the decrease in price levels.

If Over a Period of Time Real Gross Domestic Product