If the nominal GDP of a country increases and the real GDP remains constant, then we can conclude that:
A) both prices and production increased.
B) only production increased while prices remained constant.
C) only prices increased while production remained constant.
D) both prices and production remained constant.

Question

Quizplus · Accepted Answer

If the nominal GDP increases while the real GDP remains constant, it indicates that the increase in nominal GDP is due to an increase in prices rather than an increase in the quantity of goods and services produced. Real GDP is adjusted for inflation and reflects the volume of production, so if it remains constant, production has not changed.

If the Nominal GDP of a Country Increases and the Real