If x is the growth rate of nominal GDP,p is the inflation rate,and y is the growth rate of real output,then
A)y = x + p.
B)p = x + y.
C)x = p + y.
D)none of the above.

Question

Quizplus · Accepted Answer

The correct relationship is x = p + y, where x represents the growth rate of nominal GDP, p is the inflation rate, and y is the growth rate of real output. This equation reflects that the nominal GDP growth rate (x) is the sum of the inflation rate (p) and the real output growth rate (y).

If X Is the Growth Rate of Nominal GDP,p Is