If Nominal GDP and the GDP Deflator Both Rise by 5

question 167

True/False

If nominal GDP and the GDP deflator both rise by 5%, then real GDP is unchanged.

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Definitions:

Bodily Needs

Basic physiological requirements for human survival, such as food, water, shelter, and sleep.

Reciprocity

The practice of exchanging things with others for mutual benefit, especially in social and emotional contexts.

Arousal Theory

A theory in psychology that proposes individuals are motivated to maintain an optimal level of arousal.

Optimal Level

The most favorable or desirable degree of efficiency, concentration, or condition for a particular process or function.