If the Nominal GDP Rises by 6 Percent and the Real

question 50

Multiple Choice

If the nominal GDP rises by 6 percent and the real GDP rises by 3 percent, then the price level ________ by ________ percent.

• A) rises; 3
• B) rises; 9
• C) falls; 3
• D) falls; 9
• E) There is no change in inflation.

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Definitions:

Hot-Dog Stand

A small-scale food retail outlet specializing in selling hot dogs, often found at busy street locations, events, or fairs.

Reservation Price

The reservation price is the maximum price that a consumer is willing to pay for a good or service or the minimum price a seller is willing to accept.

Barbara Streisand CDs

Physical compact discs containing music recorded by the American singer, actress, and filmmaker Barbara Streisand.

Complements

Goods that are often consumed together, such that an increase in demand for one leads to an increase in demand for the other.