If both real GDP and nominal GDP of a country increased at the same rate in a particular year, which of the following is most likely to have taken place?

Question

Quizplus · Accepted Answer

If both real GDP and nominal GDP increased at the same rate, it means that the increase in nominal GDP is entirely due to an increase in prices, and there was no change in output. Therefore, the price level increased, but the increase in output in real terms cancelled out the effect of increasing prices, and there was no change in real output. This situation is consistent with option E, which implies no change in the output and a constant price level.

If Both Real GDP and Nominal GDP of a Country