If NGDP is nominal GDP and RGDP is real GDP, which of the following can be used to calculate inflation?
A) percent change in NGDP + percent change in RGDP
B) percent change in NGDP - percent change in RGDP
C) percent change in NGDP $\times$ percent change in RGDP
D) percent change in RGDP + percent change in NGDP
E) percent change in RGDP - percent change in NGDP

Question

Quizplus · Accepted Answer

Inflation can be calculated by taking the percent change in nominal GDP and subtracting the percent change in real GDP. This difference accounts for the change in price levels, which is inflation.

If NGDP Is Nominal GDP and RGDP Is Real GDP ×\times×

If NGDP Is Nominal GDP and RGDP Is Real GDP $\times$