Normally in the United States the relationship between nominal and real GDP for a given year is

Question

Quizplus · Accepted Answer

Nominal GDP refers to the GDP calculated at current market prices whereas real GDP refers to the GDP calculated at constant market prices. Therefore, the difference between nominal and real GDP is due to changes in the price level. If the price level increases, then nominal GDP will be greater than real GDP, and if the price level decreases, then nominal GDP will be less than real GDP. Thus, the correct option is D, as it states that nominal GDP is greater than real GDP because of price increases.

Normally in the United States the Relationship Between Nominal and Real