If the nominal GDP rises by 6 percent and the price level rises by 3 percent,then the real GDP __________ by __________.
A)falls;3 percent
B)rises;9 percent
C)rises;3 percent
D)falls;9 percent
E)none of the above

Question

Quizplus · Accepted Answer

Real GDP can be calculated by dividing nominal GDP by the price level (Real GDP = Nominal GDP/Price Level). If nominal GDP rises by 6 percent and the price level rises by 3 percent, then real GDP would rise by 3 percent (Real GDP = 6%/3% = 2). Thus, the correct answer is (C) real GDP rises by 3 percent.

If the Nominal GDP Rises by 6 Percent and the Price