Question

Assuming the price level increased, real gross domestic product (GDP) is greater than nominal GDP if the current period is ________ the base period, and real GDP is less than nominal GDP if the current year is ________ the base period.
a. equal to; the same as
b. after; after
c. before; after
d. after; before
e. before; before

Answer 1

Answer:

c. before; after

Explanation:

Assuming the price level increased, real gross domestic product (GDP) is greater than nominal GDP if the current period is BEFORE the base period, this is because real GDP is nominal GDP adjusted for inflation, and can as well reflects changes in real production, thus, if the price level increased in the current period before the base period, real GDP will be more or greater than nominal GDP.

Hence, this translates to real GDP becoming lesser than nominal GDP if the current year is AFTER the base period.

Answer 2

Answer:

C. Before; After

Explanation:

Assuming the price level increased, real gross domestic product (GDP) is greater than nominal GDP if the current period is BEFORE the base period, and real GDP is less than nominal GDP if the current year is AFTER the base period.