Which of the Following Could Cause Nominal GDP to Increase,but

question 159

Multiple Choice

Which of the following could cause nominal GDP to increase,but real GDP to decrease?

• A)The price level rises and the quantity of final goods and services produced rises.
• B)The price level rises and the quantity of final goods and services produced falls.
• C)The price level falls and the quantity of final goods and services produced rises.
• D)The price level falls and the quantity of final goods and services produced falls.

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Definitions:

Disposable Income

Money available to households for personal spending and saving after deducting their income taxes.

Income-Expenditure Framework

An economic model describing the relationship between an economy's total income and the spending levels that determines its equilibrium output.

Aggregate Expenditures

The total amount of spending in an economy, including consumption, investment, government spending, and net exports.

Real Gross Domestic Product

The total value of all goods and services produced within a country's borders in a specific time period, adjusted for inflation.