# which of the following would cause real gdp to exceed nominal gdp

endobj Calculating real vs nominal GDP. Real GDP is is nominal GDP adjusted for inflation. Course Hero is not sponsored or endorsed by any college or university. ( A. Comparing real GDP and nominal GDP for 2005, you see they are the same. Since the price index in the base year always has a value of 100 (by definition), nominal and real GDP are always the same in the base year. <> illustrate a change in demand and a change in quantity demand  . 4 0 obj Taht is not the case. The price level rises and the quantity of final goods and Since real GDP = nominal GDP divided by the price level, the only way real GDP could rise while nominal GDP falls would be if the price level also falls. endobj It is because 2005 has been chosen as the “base year” in this example. The price level falls and the quantity of final goods and services produced falls. ( A. Look at the data for 2010. <>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> The value of one dollar in 1990 was far greater than the value of a dollar in 2008. Remember when Nobel economist Paul Krugman predicted that the internet's effect on the economy would be no greater than the fax machine. 14. %PDF-1.5 Since nominal GDP is not adjusted for inflation, inflation can also cause it to rise. Many things that society values, such as good health, high14. Do you think mother tongue  based multilingual education help in improving countrys economic situation? B. Nominal GDP is calculated using the following equation: Where:C – Private consumptionI – Gross investmentG – Government investmentX – ExportsM – ImportsFor example, if a country reports \$ Nominal GDP = ∑ p t q t where p refers to price, q is quantity, and t indicates the year in question (usually the current year).. & c. The price level falls and the quantity of final goods and services produced rises. The third one is the correct answer, but I don't like the way it is written. What do you think are some possible solutions to reducing poverty? Which of the following could cause nominal GDP to increase next​ a. Does anyone know where I can cash an economic impact payment check? Real GDP is a measure of output; if real GDP increases, the quantity of final goods and services produced must rise, by definition. Smart phones and pizza are consumption goods. The price level falls and the quantity of final goods and services produced falls. B. Also, GDP can be used to compare the productivity levels between different countries. Log into your existing Transtutors account. Terms Which of the following could cause nominal GDP to increase, but real GDP to decrease? What do you think are some possible solutions to reducing poverty? Prices of all final goods double; quantities of all final goods remain the same, Quantities of all final goods double; prices of all final goods remain the same, (iii) Prices and quantities of all final goods double. (i) Prices of all final goods double; quantities of all final goods remain the same (ii) Quantities of all final goods double; prices of all final goods remain the same (iii) Prices and quantities of all final goods double Prices of all final goods double a. Nominal GDP is \$100, real GDP is \$50, and the GDP deflator is 50. b. Nominal GDP is \$100, real GDP is \$50, and the GDP deflator is 200. c. Nominal GDP is \$50, real GDP is \$100, and the GDP deflator is 200. d. Nominal GDP is \$50, real GDP is \$100, and the GDP deflator is 50. d. The price level falls and the quantity of final goods and services produced falls. This is because of inflation. Which of the following could cause nominal GDP to decrease, but real GDP to increase? Your solution is just a click away! 2. Still have questions? The price level rises and the quantity of final goods and services produced falls.