Nominal GDP has generally risen more rapidly than real GDP since World War II in the United States, suggesting that:
A) The general price level has declined
B) The general price level has increased
C) Productivity has increased substantially
D) World trade has increased

Question

Quizplus · Accepted Answer

Nominal GDP measures the value of economic output at current prices, while real GDP adjusts for changes in the general price level over time. The fact that nominal GDP has risen more rapidly than real GDP suggests that the general price level has increased, as it would cause output valued in current dollars to rise faster than output adjusted for inflation. This is consistent with the general trend of inflation in the US since World War II.

Nominal GDP Has Generally Risen More Rapidly Than Real GDP