If nominal GDP increases by 2 percent and the price level drops by 1 percent, real GDP:

Name: If nominal GDP increases by 2 percent and the price level drops by 1 percent, real GDP:
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Real GDP adjusts nominal GDP for changes in the price level, so if nominal GDP increases by 2% and the price level decreases by 1%, real GDP actually increases by approximately 3% because the goods and services produced are worth more in real terms.

If Nominal GDP Increases by 2 Percent and the Price