If there is inflation
A)nominal GDP grows faster than real GDP
B)the CPI is falling
C)real GDP grows faster than nominal GDP
D)production is rising but prices are held constant

Question

Quizplus · Accepted Answer

Inflation refers to a general rise in prices, which means that nominal GDP (measured in current prices) would grow faster than real GDP (measured in constant prices). This is because nominal GDP includes the increase in prices, whereas real GDP adjusts for inflation and only counts the growth in the physical output of goods and services.

If There Is Inflation