Suppose Smith pays $100 to Jones.
A) We can say with certainty that the GDP has increased by $100.
B) We can say with certainty that the GDP has increased, but we cannot determine the amount.
C) We can say with certainty that the nominal GDP has increased, but we can't say whether real GDP has increased or decreased.
D) We need more information to determine whether GDP has changed.

Question

Quizplus · Accepted Answer

We need to know more information about the transaction to determine whether GDP has changed. It is possible that this transaction was simply a transfer of funds and did not involve any actual production of goods or services, which would not affect GDP.

Suppose Smith Pays $100 to Jones