If real GDP grows faster than nominal GDP,it is a sign that
A) inflation is negative.
B) there is no inflation.
C) there is inflation, but little.
D) there is galloping inflation.

Question

Quizplus · Accepted Answer

Real GDP is adjusted for inflation, while nominal GDP is not. So, if real GDP grows faster than nominal GDP, it implies that inflation is negative - in other words, prices are falling.

If Real GDP Grows Faster Than Nominal GDP,it Is a Sign