Question

If nominal GDP​ increases, it is possible that

A. both prices and output have increased.
B. output has increased.
C. prices have increased.
D. any of the above might have happened.

Answer 1

The correct answer is D. any of the above might have happened.

Step-by-step explanation:

The correct answer is D. any of the above might have happened.

Nominal GDP measures the value of a nation's output of goods and services in dollar terms. It can increase due to either an increase in output or an increase in prices, or a combination of both. So, when nominal GDP increases, it is possible that either prices have increased, or output has increased, or both prices and output have increased. Therefore, the correct answer is D. any of the above might have happened.