If nominal GDP rises:
A)we can be sure the price level has risen.
B)real GDP may rise or fall.
C)real GDP must rise.
D)real GDP must fall.

Question

If nominal GDP rises:
A)​we can be sure the price level has risen.
B)​real GDP may rise or fall.
C)​real GDP must rise.
D)​real GDP must fall.

Quizplus · Accepted Answer

Nominal GDP can rise due to increases in both prices and quantities of goods and services produced. Therefore, real GDP may rise or fall depending on the extent to which the increase in nominal GDP is due to quantities or prices.

If Nominal GDP Rises