Suppose nominal GDP in 2011 increased by 5% (over its previous level in 2010). Given this information, we know with certainty that:
A) real GDP increased during 2010.
B) either the price level or real GDP increased during 2010.
C) both the price level and real GDP increased during 2010.
D) the price level increased during 2010.
E) more information is needed to answer this question.

Question

Quizplus · Accepted Answer

Nominal GDP can increase due to an increase in the price level, an increase in real GDP, or both. Therefore, at least one of these factors must have increased.

Suppose Nominal GDP in 2011 Increased by 5% (Over Its