What might cause an increase in nominal GDP? A. Increase in production only B. decrease in...

What might cause an increase in nominal GDP?

A. Increase in production only

B. decrease in population

C. Increase in prices only

D. Increase in prices or increase in quantity of production.

Solutions

Expert Solution

The right answer is option D, that is, increase in prices or increase in quantity of production, because nominal GDP is based on the prices in the base year and it is based on the prices in the current year and it is possible that nominal GDP can increase due to just increase in prices and also it can also increase due to the increase in the quantity of production.

Rahul Sunny answered 1 year ago

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