In a hypothetical country, Nominal GDP has increased by 5% . Which of the following must be true?(1 point)

Question

Responses

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

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

The quantity of economic output has decreased.
The quantity of economic output has decreased.

Prices have increased.

Answer 1

In a hypothetical country where Nominal GDP has increased by 5%, the correct response is:

Either price, economic output, or both has increased.

Nominal GDP measures the total monetary value of all finished goods and services produced within a country's borders in a specific time frame, without adjusting for inflation. Therefore, an increase in Nominal GDP can occur due to an increase in the quantity of goods and services produced, an increase in prices, or a combination of both.