Suppose that nominal GDP increased by 3 percent,but the real GDP increased by only 1 percent during that same period.Which of the following best explains the phenomenon?
A)Prices increased by approximately 1 percent.
B)Prices increased by approximately 2 percent.
C)Prices increased by approximately 3 percent.
D)Prices increased by approximately 4 percent.

Question

Quizplus · Accepted Answer

The difference between nominal GDP and real GDP is due to inflation, so if nominal GDP increased by 3 percent and real GDP only increased by 1 percent, it means that prices increased by approximately 2 percent.

Suppose That Nominal GDP Increased by 3 Percent,but the Real