Change in Gross Domestic Product Quick Check

Question

1 of 51 of 5 Items
Question
In a hypothetical country, Nominal GDP has increased by 5%
. 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 decreased.
The quantity of economic output has decreased.

The quantity of economic output has increased.

Answer 1

In the scenario where Nominal GDP has increased by 5%, the correct answer is:

Either price, economic output, or both has increased.

Nominal GDP measures the total value of all goods and services produced in a country at current market prices, so an increase can result from an increase in prices, an increase in the quantity of goods and services produced, or a combination of both.