If the price level and nominal GDP both doubled, then real GDP would:
A) also double.
B) increase by half.
C) remain unchanged.
D) decrease by half.

Question

Quizplus · Accepted Answer

Real GDP is calculated by dividing nominal GDP by the price level (or adjusting it for inflation). If both nominal GDP and the price level double, the ratio between them remains the same, meaning real GDP stays unchanged.

If the Price Level and Nominal GDP Both Doubled, Then