John was researching the economic growth of a country between 2010 and 2015.Using 2010 as the base year,he calculated a 12 per cent increase for real GDP and a 10 per cent increase for nominal GDP.His results indicate that

Question

Quizplus · Accepted Answer

Since John calculated a 12% increase in real GDP and a 10% increase in nominal GDP, it means that the increase in nominal GDP is due to an increase in both the quantity of goods and services produced (real GDP) and an increase in prices (inflation). However, the fact that the increase in real GDP is higher than the increase in nominal GDP indicates that prices decreased over the period, resulting in an overall increase in the quantity of goods and services produced, as seen in choice C.

John Was Researching the Economic Growth of a Country Between