If real GDP grew by 4% and nominal GDP grew by 3%,then the inflation rate was:
A) 1%.
B) -1%.
C) 7%.
D) 12%.
E) 0%.

Name: If real GDP grew by 4% and nominal GDP grew by 3%,then the inflation rate was: A) 1%. B) -1%. C) 7%. D) 12%. E) 0%.
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Question

Quizplus · Accepted Answer

The difference between real GDP growth and nominal GDP growth is the inflation rate. In this case, real GDP growth (4%) is higher than nominal GDP growth (3%), which means that the inflation rate is negative (-1%).

If Real GDP Grew by 4% and Nominal GDP Grew