Assume that from 2007 to 2009 the U.S.economy experiences inflation.Also,assume that GDP remains constant from 2007 to 2009.Therefore,

A) real GDP rises.
B) real GDP falls.
C) there is no change in real GDP.
D) no conclusion can be reached as to whether real GDP rises,falls,or remains the same.

Question

Kobie Sloan · Accepted Answer

Final Answer : B, Explanation :  If inflation occurs and GDP remains constant, it means that the nominal GDP has increased due to the increase in prices. However, as real GDP is adjusted for inflation, it indicates a decrease in the economy's total output. Therefore, real GDP falls.

Assume that from 2007 to 2009 the U.S.economy experiences inflation.Also,assume that GDP remains constant from 2007 to 2009.Therefore,

A) real GDP rises.
B) real GDP falls.
C) there is no change in real GDP.
D) no conclusion can be reached as to whether real GDP rises,falls,or remains the same.

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Assume that from 2007 to 2009 the U.S.economy experiences inflation.Also,assume that GDP remains constant from 2007 to 2009.Therefore,A) real GDP rises.B) real GDP falls.C) there is no change in real GDP.D) no conclusion can be reached as to whether real GDP rises,falls,or remains the same.

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Learning Objectives

Learning Objectives

Related questions

Assume that from 2007 to 2009 the U.S.economy experiences inflation.Also,assume that GDP remains constant from 2007 to 2009.Therefore,

A) real GDP rises.
B) real GDP falls.
C) there is no change in real GDP.
D) no conclusion can be reached as to whether real GDP rises,falls,or remains the same.