-Refer to the above diagram.Which of the following statements is correct?
A) The price index is greater than 100 for every year shown on the graph.
B) Nominal GDP must be deflated in each year prior to 1992 to determine real GDP.
C) Real GDP has grown in this economy,but nominal GDP has not.
D) Nominal GDP must be deflated in each year since 1992 to determine real GDP.

Question

-Refer to the above diagram.Which of the following statements is correct?
A) The price index is greater than 100 for every year shown on the graph. 
B) Nominal GDP must be deflated in each year prior to 1992 to determine real GDP. 
C) Real GDP has grown in this economy,but nominal GDP has not. 
D) Nominal GDP must be deflated in each year since 1992 to determine real GDP.

Quizplus · Accepted Answer

Since 1992, if the price index is greater than 100, nominal GDP must be deflated to determine real GDP.

-Refer to the Above Diagram