If real GDP is decreasing,
A)GDP must be increasing.
B)GDP must be decreasing.
C)prices must also be decreasing.
D)employment in the economy must be increasing.
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

Real GDP measures the value of all goods and services produced by an economy adjusted for inflation or deflation. A decrease in real GDP does not necessarily mean that nominal GDP is decreasing, prices are decreasing, or employment is increasing. It simply indicates a reduction in the inflation-adjusted output of the economy.

If Real GDP Is Decreasing