In a hypothetical country, Nominal GDP has increased by 5%

Question

. Which of the following must be true?(1 point)
Responses

Either price, economic output, or both has increased.
Either price, economic output, or both has increased.

Prices have increased.
Prices have increased.

The quantity of economic output has increased.
The quantity of economic output has increased.

The quantity of economic output has decreased.

Answer 1

If nominal GDP has increased by 5%, it indicates that the total value of goods and services produced in the country has risen, but it does not specify whether this increase is due to an increase in prices, an increase in economic output, or both.

Therefore, the response that must be true is:

Either price, economic output, or both has increased.

This option encompasses all possible scenarios that could contribute to the increase in nominal GDP. The other options cannot be conclusively determined to be true based solely on the information given.