Unformatted text preview: Question 2 0/ 1 pts If nominal GDP is growing more quickly than real GDP, which is most likely? nswer 7 rising prices
an expansion 4 a recession Recall how real GDP uses prices from a given or "base" year in its calculations. For example, real GDP for the ﬁrst
quarter of 2017 will use prices from 2009, but nominal GDP will use prices from the ﬁrst quarter of 2017 (i.e., the period in which GDP is being computed for). Thus, if nominal GDP is growing more quickly than real GDP, it must be the case that prices are pulling are rising
over this period‘ For example, in 2009 in the US., real and nominal GDP are the same but today nominal GDP is higher. This is due to rising prices over these years. ...
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- Fall '10
- gross domestic product, 1 pts, Rising prices