If real GDP is greater than nominal GDP for a particular year, then
A) prices must have fallen between the current year and the base year.
B) production must have increased between the current year and the base year.
C) production must have fallen between the current year and the base year.
D) prices must have risen between the current year and the base year.
E) prices must have fallen between the current year and the immediate past year.

Question

Quizplus · Accepted Answer

Real GDP is adjusted for inflation, so if real GDP is greater than nominal GDP, it indicates that prices have fallen since the base year, making the value of goods and services higher when adjusted for price changes.

If Real GDP Is Greater Than Nominal GDP for a Particular