The nation of a country spent 200 million Rupees on goods and services in 2010. In 2011 the country spent 220 million Rupees on goods and services, even though output decreased compared to 2010. What happened to real GDP and nominal GDP between these two years?

real GDP decreased; nominal GDP decreased

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real GDP increased; nominal GDP decreased

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real GDP increased; nominal GDP increased

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real GDP decreased; nominal GDP increased

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Solution

The correct option is D
real GDP decreased; nominal GDP increased

Real GDP has decreased because less is being produced. Nominal GDP has increased because more was spent on these goods and services.

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The nation of a country spent 200 million Rupees on goods and services in 2010. In 2011 the country spent 220 million Rupees on goods and services, even though output decreased compared to 2010. What happened to real GDP and nominal GDP between these two years?

The correct option is D real GDP decreased; nominal GDP increased Real GDP has decreased because less is being produced. Nominal GDP has increased because more was spent on these goods and services.

The correct option is D
real GDP decreased; nominal GDP increased

Real GDP has decreased because less is being produced. Nominal GDP has increased because more was spent on these goods and services.