Nominal gross domestic product:
A) Is not affected by the level of inflation
B) Changes only when there is a change in output
C) Changes only when there is a change in the price level
D) Can change when there is a change in either output or the price level

Question

Quizplus · Accepted Answer

Nominal GDP can change when there is a change in either output or the price level. An increase in output or an increase in prices, or both, will result in an increase in nominal GDP, while a decrease in output or prices, or both, will result in a decrease in nominal GDP. Therefore, nominal GDP is affected by both changes in output and changes in the price level.

Nominal Gross Domestic Product