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Macroeconomics

Course: Macroeconomics > Unit 2

Lesson 6: Real vs. nominal GDP

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Real vs. nominal GDP

AP.MACRO: MEA‑1 (EU), MEA‑1.I (LO), MEA‑1.I.1 (EK), MEA‑1.I.2 (EK), MEA‑1.J (LO), MEA‑1.J.1 (EK), MEA‑1.J.2 (EK)

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Justinia is a country that produces three goods: guitars, physics books, and sandals.

Which of the following would definitely cause an increase in nominal GDP but not a change real GDP in Justinia?

(Choice A)
The quantity of goods produced increases; prices stay the same
(Choice B)
The quantity of goods produced increases; prices decrease
(Choice C)
The quantity of goods produced increases; prices increase
(Choice D)
The quantity of goods produced decreases; prices stay the same
(Choice E)
The quantity of goods produced stays the same; prices increase