If the growth rates of nominal GDP and real GDP in an economy are 6 percent and 2 percent,respectively,the inflation rate in the economy must be ________.
A) 2 percent
B) 3 percent
C) 4 percent
D) 8 percent

Question

Quizplus · Accepted Answer

The difference between nominal GDP growth rate and real GDP growth rate is equal to the inflation rate. 
So, inflation rate = nominal GDP growth rate - real GDP growth rate 
= 6% - 2% 
= 4% 
Hence, the answer is option C, i.e., 4 percent.

If the Growth Rates of Nominal GDP and Real GDP