If nominal GDP is declining,then it must be the case that:
A) fewer goods and services are being produced.
B) prices must be lower on average.
C) prices must be increasing more rapidly than production.
D) prices are falling at a greater rate than production is rising.
E) production is rising at a greater rate than prices are falling.

Question

Quizplus · Accepted Answer

Nominal GDP is the value of all goods and services produced in an economy in a given period of time, valued at current prices. If nominal GDP is declining, then it must be the case that prices are falling at a greater rate than production is rising.

If Nominal GDP Is Declining,then It Must Be the Case