If GDP rose from 8000 to 10,000 and prices rose by 20 percent,real GDP

A) fell by over 10 percent.
B) fell by less than 10 percent.
C) stayed the same.
D) rose by less than 10 percent.
E) rose by more than 10 percent.

Question

Marquis Watson · Accepted Answer

Final Answer : D, Explanation :  To calculate the real GDP growth, we adjust the nominal GDP growth for inflation. The nominal GDP rose from 8000 to 10000, which is a 25% increase (2000/8000). However, with a 20% inflation rate, the real GDP growth is less than the nominal growth but still positive, indicating it rose by less than 10 percent.

If GDP rose from 8000 to 10,000 and prices rose by 20 percent,real GDP

A) fell by over 10 percent.
B) fell by less than 10 percent.
C) stayed the same.
D) rose by less than 10 percent.
E) rose by more than 10 percent.

Definitions

Learning Objectives

Learning Objectives

Related questions

If GDP rose from 8000 to 10,000 and prices rose by 20 percent,real GDPA) fell by over 10 percent.B) fell by less than 10 percent.C) stayed the same.D) rose by less than 10 percent.E) rose by more than 10 percent.

Definitions

Learning Objectives

Learning Objectives

Related questions

If GDP rose from 8000 to 10,000 and prices rose by 20 percent,real GDP

A) fell by over 10 percent.
B) fell by less than 10 percent.
C) stayed the same.
D) rose by less than 10 percent.
E) rose by more than 10 percent.