Answer:
C
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Nominal GDP is GDP calculated using current year prices.
If nominal GDP increases, it can be as a result of an increase in price level or an increase in output
for example,
In economy A, price in year 1 is 10 and price in year 2 is 20. Output in both years is 20
Nominal GDP in year 1 = (10 X 20) = 200
Nominal GDP in year 2 = (20 X 20) = 400
It can be seen that nominal GDP increased even though output did not increase
Assume that in economy B, price in year 1 and 2 is 10. Output in year 1 is 100 and output in year 2 is 200
Nominal GDP in year 1 = (10 x 100) = 1000
Nominal GDP in year 2 = (10 x 200) = 2000
Increase in nominal GDP in this economy is as a result of an increase in output
