When the value of nominal GDP increases from one year to the next,we know that one or two things must have happened during that time:
A)The nation produced fewer goods and services and/or prices fell for goods and services.
B)Consumption expenditure increased and/or corporate profits increased.
C)Investment increased and/or payments to employees increased.
D)The nation produced more goods and services and/or prices rose for goods and services.
E)the value of real GDP must have increased and/or the price level must have decreased.

Question

Quizplus · Accepted Answer

The increase in nominal GDP indicates an increase in the total value of goods and services produced (i.e. a rise in production and/or prices of goods and services). Therefore, option D, which states that the nation produced more goods and services and/or prices rose for goods and services, is the best choice.

When the Value of Nominal GDP Increases from One Year