Suppose, in Dollar Terms, Nominal GDP Increased Approximately 4 Percent

question 144

Multiple Choice

Suppose, in dollar terms, nominal GDP increased approximately 4 percent during a given year, and real GDP decreased 1 percent. Which of the following best explains these events?

• A) The money supply increased approximately 4 percent.
• B) Prices decreased approximately 3 percent.
• C) Prices increased approximately 4 percent.
• D) Prices increased approximately 5 percent.

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