In Figure 5.1,during the 1980-1990 time periods,real GDP was relatively constant but nominal GDP increased.This can be explained by

Question

Quizplus · Accepted Answer

The increase in nominal GDP but relatively constant real GDP during the 1980-1990 time period suggests that inflation was occurring. Inflation is the general increase in prices over time, leading to an increase in the nominal value of goods and services produced, even if the actual production levels remain constant.