Why Has Nominal GDP Historically Increased More Rapidly Than Real

question 65

Multiple Choice

Why has nominal GDP historically increased more rapidly than real GDP in Canada?

• A)because of high interest rates
• B)because of deflation
• C)because of inflation
• D)because of statistical discrepancies

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Definitions:

Crude Quantity Theory

A basic hypothesis regarding the relationship between the quantity of money in an economy and its level of prices.

Constant

A value that remains unchanged throughout the scope of an equation, analysis, or experiment.

PQ

A notation commonly used in economics to represent the product of price (P) and quantity (Q), indicating the total revenue.

GDP

Gross Domestic Product, the total value of all goods and services produced within a country in a given period.