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 these answers are correct.

Question

Quizplus · Accepted Answer

Real GDP is calculated by dividing nominal GDP by the price level. Therefore, real GDP changes by the difference between the percent change in nominal GDP and the percent change in price level. In this case, real GDP rises by 3 percent (6 percent - 3 percent).

If the Nominal GDP Rises by 6 Percent and the Price