Is It Possible for a Country's Nominal GDP to Increase

question 73

Multiple Choice

Is it possible for a country's nominal GDP to increase and real GDP to decrease from one year to the next?

• A) Yes; this would indicate a larger rise in prices relative to a decrease in output
• B) No; because prices are held constant, this would be mathematically impossible
• C) Yes; this would indicate a larger rise in output relative to a decrease in prices
• D) No; because output is held constant, this would be mathematically impossible

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Definitions:

Consideration

A value promised in exchange for a certain act in a contractual agreement.

Quantum Meruit

A legal principle where a party is compensated with a reasonable sum for goods or services provided, even if no contract exists.

Quantum Valebant

A principle in contract law that allows for the recovery of as much as deserved, or the reasonable value of goods or services rendered when no contract price was established.

Commission

A fee paid to an agent or employee for conducting a transaction or performing a service.