If the quantity of goods and services produced in the economy decreases,
A)it may be possible for real GDP to increase.
B)real GDP would certainly increase.
C)it may be possible for nominal GDP to increase.
D)nominal GDP would certainly increase.

Question

Quizplus · Accepted Answer

Real GDP is adjusted for inflation and reflects the volume of goods and services produced in the economy. If the quantity of goods and services decreases, real GDP would decrease. However, nominal GDP, which is not adjusted for inflation, could still increase if prices rise sufficiently to offset the decrease in quantity.

If the Quantity of Goods and Services Produced in the Economy