Suppose nominal GDP in Greece decreased by 5% in 2018. Given this information, we know with certainty that
A) the aggregate price level in Greece decreased in 2018.
B) real GDP in Greece decreased in 2018.
C) both the aggregate price level AND real GDP decreased in Greece in 2018.
D) more information is needed to answer this question.

Question

Quizplus · Accepted Answer

Nominal GDP is the market value of all final goods and services produced in a country in a given period, not adjusted for inflation. A decrease in nominal GDP could result from a decrease in the aggregate price level, a decrease in real GDP, or both. Without information on how prices changed (inflation or deflation) or the specific changes in the quantity of goods and services produced (real GDP), it's impossible to determine the exact cause of the decrease in nominal GDP.

Suppose Nominal GDP in Greece Decreased by 5% in 2018