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If there is inflation, Group of answer choices nominal GDP and real GDP decrease at the...

If there is inflation,

Group of answer choices

nominal GDP and real GDP decrease at the same rate

nominal GDP increases slower than real GDP

nominal GDP increases faster than real GDP

nominal GDP and real GDP increase at the same rate

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Answer #1

Answer: Nominal GDP increases faster than the real GDP

Inflation shows the increase in the price of a basket of goods. If there is inflation, the growth in real GDP is slower compared to nominal GDP. The nominal GDP is not adjusted with inflation and this just shows the increase in the the price. Real GDP is adjusted with inflation and measured based on the products but will not consider the inflated price. So, nominal GDP increases faster than real GDP during inflation.

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