If nominal GDP increases from one year to the next, _____ must have risen.

Name: If nominal GDP increases from one year to the next, _____ must have risen.
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Question

Quizplus · Accepted Answer

Nominal GDP can increase due to either an increase in output or an increase in prices or both. Therefore, the best choice is D, which includes both output and prices. Real GDP adjusts for changes in prices, so if nominal GDP increases but real GDP stays the same, it means that only prices have increased.

If Nominal GDP Increases from One Year to the Next