Assume that nominal income increases by 5% and the price level increases by 3%, which of the following is true? Real GDP increased by approximately 2%. The impact on real GDP is indeterminate. If the price level increased by 3%, nominal GDP must increase by less than 3%, not by 5%. Real GDP must have decreased. The percentage increase in real GDP must exceed the percentage increase in the price level.

Assume that nominal income increases by 5% and the price level increases by 3%, which of the following is true? Real GDP increased by approximately 2%. The impact on real GDP is indeterminate. If the price level increased by 3%, nominal GDP must increase by less than 3%, not by 5%. Real GDP must have decreased. The percentage increase in real GDP must exceed the percentage increase in the price level.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter13: Inflation

Section: Chapter Questions

Problem 6SQ

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Assume that nominal income increases by 5% and the price level increases by 3%, which of the following is true? Real GDP must have decreased. The impact on real GDP is indeterminate. The percentage increase in real GDP must exceed the percentage increase in the price level. Real GDP increased by approximately 2%. If the price level increased by 3%, nominal GDP must increase by less than 3%, not by 5%.
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