Which of the following statements about GDP is FALSE?
A) Real GDP will increase if there is an increase in the output of the economy.
B) Real GDP will increase if there is an increase in the economy's level of prices.
C) Money GDP will increase if there is an increase in the output of the economy.
D) Money GDP will increase if there is an increase in the economy's level of prices.

Question

Quizplus · Accepted Answer

Real GDP is adjusted for changes in the price level, meaning it reflects changes in the quantity of goods and services produced in the economy, not changes in the price level. Therefore, an increase in the economy's level of prices would not directly increase real GDP.

Which of the Following Statements About GDP Is FALSE