If nominal GDP rises:
A)real GDP may either rise or fall
B)the price level has risen
C)real GDP must fall
D)real GDP must also rise
E)the price level has fallen

Question

Quizplus · Accepted Answer

Nominal GDP measures the total value of goods and services produced in a country at current market prices. Therefore, if nominal GDP rises, it could either be due to an increase in the quantity of goods and services produced (real GDP) or due to an increase in their prices (inflation). Therefore, real GDP may either rise or fall depending on the reason for the increase in nominal GDP.

If Nominal GDP Rises