Nominal value of GDP increased

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Suppose that the nominal value of GDP increased by 5 percent during a given year, but real GDP decreased by 3 percent. Which of the following best explains these events? 1. the money supply decreased by approximately 5 percent. 2. prices fell by approximately 5 percent. 3. prices increased by 2 percent. 4. the real productive capacity of the economy increased by approximately 5 percent.

Reference no: EM13976108

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