Nominal GDP will definitely increase when
A)prices increase and output increases.
B)prices increase and output decreases.
C)prices decrease and output increases.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Nominal GDP is calculated by multiplying the quantity of goods and services produced by their current market prices. Therefore, when prices and output increase, nominal GDP will also increase. Option B and C will not necessarily increase nominal GDP, as an increase in prices and a decrease in output, or a decrease in prices and an increase in output, might result in no change or a decrease in nominal GDP.

Nominal GDP Will Definitely Increase When