Fundamentals of Macroeconomics Assessment
Module 1 • 10 Questions
Question 1 of 10
0 of 10 answered
A country reports that nominal GDP rose by 12% between two years. During the same period, its fixed basket price index rose by 8%. Which interpretation is most defensible using the module logic?
A
Real output definitely rose by 12% because GDP is always a quantity measure.
B
The entire 12% increase reflects inflation because current prices include price changes.
C
Real output likely rose by less than 12% because current-price GDP mixes quantity growth with price changes.
D
Real output cannot be compared across years even with constant prices because goods have different units.