Question

If the quantity of goods and services produced in the economy decreases,

a) real GDP would certainly increase
b) it may be possible for real GDP to increase
c) nominal GDP would certainly increase
d) it may be possible for nominal GDP to increase

Answer 1

d) it may be possible for nominal GDP to increase

Step-by-step explanation:

This is the formula to count nominal GDP:

Consumption + Investment + Government Spending + Net Export.

On hindsight, a decrease in production of goods and services tend to lead to a decrease in consumption. Which mean that it will negatively affect the total of nominal GDP.

But, that's not always the case.

There are some cases decrease in consumption might not be as big as the increase in Investment and government spending. So it's still may be possible for nominal GDP to increase.