If the Percent Change in Real GDP Is 5 Percent

question 47

Multiple Choice

If the percent change in real GDP is 5 percent and inflation rate is 1 percent, what is the percent change in nominal GDP?

• A)0 percent.
• B)2 percent.
• C)4 percent.
• D)6 percent.

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Definitions:

Economic Growth

Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time, typically measured as the percent rate of increase in real gross domestic product (GDP).

Capital Goods

Tangible resources utilized by a business in creating goods and services for consumer consumption during the manufacturing process.

Technology Improvement

Enhancements or upgrades in technological capabilities that increase efficiency, productivity, or performance in processes or products.

Production Possibilities Curve

illustrates the maximum achievable output of two goods with a given set of resources and technology, demonstrating the trade-offs and opportunity costs in production.