If real GDP equals nominal GDP,then:
A) output did not grow.
B) there was no inflation.
C) the current year is the base year.
D) the growth in output was equal to the growth in the price level.
E) the growth in output was greater than the growth in the price level.

Question

Quizplus · Accepted Answer

If real GDP equals nominal GDP, it means that the GDP deflator (the ratio of nominal GDP to real GDP, multiplied by 100) is equal to 100, which only happens in the base year when the price level is taken as 100. Therefore, the current year must be the base year, and there was no inflation or change in output compared to the base year.

If Real GDP Equals Nominal GDP,then