If nominal or money GDP increases 6 percent in 2011 (compared to 2010), and real GDP increases 4 percent over the same period, which of the following must be true?
A) Exports exceeded imports.
B) The general price level as measured by the GDP deflator fell during 2011.
C) The economy entered a recession in 2011.
D) Inflation during 2011 was 2 percent.

Question

Quizplus · Accepted Answer

The difference between the nominal GDP growth rate (6%) and the real GDP growth rate (4%) is the inflation rate, which is 2%.

If Nominal or Money GDP Increases 6 Percent in 2011