A country reported nominal GDP of$200 billion in 2006 and $180 billionin 2005; it reported a GDP deflatorof 125 in 2006 and 105 in 2005.Between 2005 and 2006:a. real output and the price levelboth roseb. real output rose and the pricelevel fellc. real output fell and the price levelrosed. real output and the price levelboth fell

the GDP deflator measures the changes in the GDP that results from changes in the price level.…

Answered: A country reported nominal GDP of $200…

A country reported nominal GDP of $200 billion in 2006 and $180 billion in 2005; it reported a GDP deflator of 125 in 2006 and 105 in 2005. Between 2005 and 2006:

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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Question

A country reported nominal GDP of
$200 billion in 2006 and $180 billion
in 2005; it reported a GDP deflator
of 125 in 2006 and 105 in 2005.
Between 2005 and 2006:
a. real output and the price level
both rose
b. real output rose and the price
level fell
c. real output fell and the price level
rose
d. real output and the price level
both fell

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