A problem of interpreting nominal GDP is that:
A) an increase in nominal GDP can be caused by changes in either price or quantity.
B) it does not measure changes in employment.
C) it does not measure changes in price.
D) it does not include net exports.
E) it does not include the value obtained through purchases of stocks and bonds.

Question

Quizplus · Accepted Answer

Nominal GDP measures the total value of goods and services produced in an economy without adjusting for inflation. However, an increase in nominal GDP can be caused by changes in either the prices or the quantity of goods and services produced. Therefore, it is difficult to interpret changes in nominal GDP without considering the factors behind the changes.

A Problem of Interpreting Nominal GDP Is That