If nominal GDP in 2005 exceeds nominal GDP in 2004, then the production of output ?
Correct answer: D. may have risen fallen, or stayed the same because there is not enough information to determine what happened to real output
- A. must have fallen
- B. must have risen
- C. must have stayed the same
- D. may have risen fallen, or stayed the same because there is not enough information to determine what happened to real output
Explanation
Nominal GDP reflects both quantities and prices, so a rise in it does not reveal what happened to real output. Production may have risen, fallen, or stayed unchanged if prices moved accordingly.
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