Suppose the real gross domestic product (GDP)equals $100 billion this year and the nominal gross domestic product (GDP)is $200 billion.This implies that the price level has increased by _____.
A)$200 billion
B)50 percent
C)$100 billion
D)100 percent
E)200 percent

Question

Quizplus · Accepted Answer

The price level increase is calculated by comparing the nominal GDP to the real GDP. If the nominal GDP is $200 billion and the real GDP is $100 billion, it means the nominal GDP is twice the real GDP, indicating prices have doubled or increased by 100 percent.

Suppose the Real Gross Domestic Product (GDP)equals $100 Billion This