ECONOMICS
GDP
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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GDP; decreased
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GDP; increased
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Real GDP; decreased
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Real GDP; increased
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Detailed explanation-1: -Answer and Explanation: This statement is true.
Detailed explanation-2: -An increase in GDP will raise the demand for money because people will need more money to make the transactions necessary to purchase the new GDP. In other words, real money demand rises due to the transactions demand effect.
Detailed explanation-3: -The real GDP only increases if the quantity of goods and services produced by the economy rises. Indeed the main reason for using the real GDP is that it removes any effect that inflation may have on the GDP of a country.
Detailed explanation-4: -The real economic growth rate is expressed as a percentage that shows the rate of change in a country’s GDP, typically from one year to the next.