What likely occurred during 2012 if nominal GDP did not change and real GDP decreased,relative to the year 2011?
A)Total production of goods and services in the economy did not change in 2012.
B)The economy experienced deflation during 2012.
C)The price level did not change during 2012.
D)Total production of goods and services in the economy declined during 2012.

Question

Quizplus · Accepted Answer

If nominal GDP did not change, and real GDP decreased, it means that there was a decrease in the quantity of goods and services produced in the economy in 2012 compared to 2011. Therefore, the best choice is D, which states that total production of goods and services in the economy declined during 2012. Choices A, B, and C are incorrect because they assume that there was no change in nominal GDP, which is not the case based on the information provided.

What Likely Occurred During 2012 If Nominal GDP Did Not