When there is rapid inflation,
A) growth in nominal GDP exceeds growth in real GDP.
B) growth in real GDP exceeds growth in nominal GDP.
C) growth in real GDP and nominal GDP are roughly equal.
D) there can never be any growth in nominal GDP.
E) government tries to increase growth in real GDP.

Question

Quizplus · Accepted Answer

Rapid inflation typically causes an increase in nominal GDP (the total value of goods and services produced), but may not necessarily result in a commensurate increase in real GDP (the value of goods and services produced adjusted for inflation). This is because inflation can cause an increase in prices, which in turn can inflate GDP figures, making them appear higher than they really are.

When There Is Rapid Inflation