Real GDP can increase if the
I.quantities of goods and services produced decrease and prices fall by a smaller percentage.
Ii.quantities of goods and services produced decrease and prices fall by a larger percentage.
Iii.quantities of goods and services produced decrease and prices do not change.
Iv.quantities of goods and services produced increase.
A)i only
B)iii only
C)iv only
D)i and iii
E)i,ii,and iii

Question

Quizplus · Accepted Answer

Real GDP can only increase if the quantities of goods and services produced increase. None of the other options suggest an increase in production, and options I, II, and III all suggest a decrease in production. Therefore, the only option that could result in an increase in real GDP is IV, which suggests an increase in production.

Real GDP Can Increase If the