If Both Real GDP and Nominal GDP of a Country

question 7

Multiple Choice

If both real GDP and nominal GDP of a country increased at the same rate in a particular year, which of the following is most likely to have taken place?

• A)Output increased and the price level increased
• B)Output increased and the price level decreased
• C)Output decreased and the price level increased
• D)Output decreased and the price level decreased
• E)Output increased and the price level remained constant

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Definitions:

Cash Inflows

The total amount of money received by a company or individual from various sources, including sales, investments, financing, and other business activities.

Initial Investment

The amount of money used to start a project, purchase an asset, or invest in a financial venture.

Coefficient of Variation

A standardized measure of dispersion of a probability distribution or frequency distribution, often expressed as a percentage.

Variance

A measure of the dispersion or spread of a set of data points around their mean value.