If all quantities produced rise by 5 percent and allprices fall by 5 percent, which of the following bestdescribes what occurs?a. Real GDP rises by 5 percent, while nominalGDP falls by 5 percent.b. Real GDP rises by 5 percent, while nominalGDP is unchanged.c. Real GDP is unchanged, while nominal GDP risesby 5 percent.d. Real GDP is unchanged, while nominal GDP fallsby 5 percent.

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
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Chapter15: Measuring A Nation's Income
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If all quantities produced rise by 5 percent and all
prices fall by 5 percent, which of the following best
describes what occurs?
a. Real GDP rises by 5 percent, while nominal
GDP falls by 5 percent.
b. Real GDP rises by 5 percent, while nominal
GDP is unchanged.
c. Real GDP is unchanged, while nominal GDP rises
by 5 percent.
d. Real GDP is unchanged, while nominal GDP falls
by 5 percent.

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