If real GDP in 2018 (using 2009 prices)is lower than nominal GDP of 2017,then
A)prices in 2018 are lower than prices in 2017.
B)nominal GDP in 2018 equals nominal GDP in 2017.
C)prices in 2018 are higher than prices in 2017.
D)real GDP in 2018 is larger than real GDP in 2017.

Question

Quizplus · Accepted Answer

If real GDP in 2018 (using 2009 prices) is lower than nominal GDP of 2017, it means that there has been a decrease in the value of goods and services produced in 2018 compared to that in 2017. However, since the nominal GDP is higher, it suggests that there has been an increase in the overall price level. Therefore, option A - prices in 2018 are lower than prices in 2017, is the best choice.

If Real GDP in 2018 (Using 2009 Prices)is Lower Than