If Real GDP Is Greater Than Nominal GDP for a Particular

question 91

Multiple Choice

If real GDP is greater than nominal GDP for a particular year, then

• A)production must have increased between the current year and the base year.
• B)prices must have fallen between the current year and the immediate past year.
• C)prices must have fallen between the current year and the base year.
• D)production must have fallen between the current year and the base year.
• E)prices must have risen between the current year and the base year.

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Definitions:

Rubies

Precious red gemstones that are valued for their color, hardness, and rarity.

Opportunity Cost

The potential benefit that one misses out on when choosing one alternative over another.

Trade

The activity of buying, selling, or exchanging goods and services between people, firms, or countries.

Comparative Advantage

The ability of a country or firm to produce a particular good or service at a lower opportunity cost than its trade partners.