If Real GDP Increased by 2% and Nominal GDP Increased

question 93

Multiple Choice

If real GDP increased by 2% and nominal GDP increased by 2%, then output:

• A)​increased and the price level increased.
• B)​increased and the price level decreased.
• C)​increased and the price level remained unchanged.
• D)​remained unchanged and the price level increased.

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Definitions:

Laboratory Setting

A controlled environment designed for scientific experiments, research, and testing, where conditions can be manipulated to observe effects on variables.

Experimentation Problems

Issues arising during the process of conducting experiments that can affect outcomes, such as biases, uncontrollable variables, or ethical considerations.

Causality

Refers to the analysis of causes and their effects. Specifically, causality means that a change in the independent variable (x) produces a change in the dependent variable (y). In analyzing survey data, we establish causality by demonstrating that an association exists between x and y; x precedes y; and the introduction of a causally prior control variable does not result in the original association disappearing.

Empirically Established

Information or theories that are confirmed or supported by observation, experiment, or other forms of scientific research.