Explain whether it is possible for nominal GDP to increase and real GDP to decrease in the same period
What will be an ideal response?
Nominal GDP can rise because either the price level is rising or the real quantity of goods and services produced has increased. Nominal GDP can increase while real GDP falls if the increase in the aggregate price level is larger (in a proportionate sense) than the drop in real economic activity.
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Based on the production function in the above figure, which of the following is an attainable combination of labor and real GDP?
i. 300 billion hours of labor and real GDP of $20 trillion ii. 300 billion hours of labor and real GDP of $8 trillion iii. 100 billion hours of labor and real GDP of $12 trillion A) i only B) ii only C) iii only D) ii and iii E) i and ii
If marginal product is equal to average product, then total product is at a maximum
Indicate whether the statement is true or false