An increase in real GDP from 2002 to 2006 necessarily indicates that
A) people are better off in 2002 than they were in 2006.
B) depreciation was lower in 2002 than it is in 2006.
C) prices increased between 2002 and 2006.
D) quantities of goods and services produced increased between 2002 and 2006.

Question

Quizplus · Accepted Answer

Real GDP measures the value of goods and services produced in an economy, adjusted for inflation or price changes. An increase in real GDP between two periods indicates that the quantity of goods and services produced has increased, not necessarily that prices have increased or that people are better off. Depreciation, while it can impact GDP, is not directly related to changes in real GDP.

An Increase in Real GDP from 2002 to 2006 Necessarily