If real GDP declines in a given year, nominal GDP
A)must also be declining.
B)must also be increasing.
C)may either rise or fall.
D)is likely to remain constant.

Name: If real GDP declines in a given year, nominal GDP A)must also be declining. B)must also be increasing. C)may either rise or fall. D)is likely to remain constant.
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Question

Quizplus · Accepted Answer

Nominal GDP can rise or fall independently of real GDP because it is affected by changes in price levels, whereas real GDP is adjusted for inflation.

If Real GDP Declines in a Given Year, Nominal GDP