If Nominal GDP Increased by 11 Per Cent While Real

question 40

Multiple Choice

If nominal GDP increased by 11 per cent while real GDP increased by only 5 per cent, then:

• A) the price level remained steady but real output fell by around 6 per cent
• B) the price level must have increased by around 16 per cent
• C) the price level must have increased by around 6 per cent
• D) the unemployment rate must have fallen during the year

---

Definitions:

Dependent Variable

The outcome variable in an experiment or study that researchers wish to explain or predict, which changes in response to the independent variable.

Explanatory Variables

Variables in a statistical model that are used to explain variations in the dependent variable; also known as independent variables.

Qualitative Predictor Variables

Variables that categorize or describe data based on attributes or qualities, such as gender, color, or type, which do not have a numerical value.

Dummy Variables

Numerical variables used in regression analysis to represent subgroups of the sample in a study.