MGT411 - Money & Banking (GDB)

[Amir ..]

Suppose there are only 100 goods being produced in a country during a particular year. In the next year the same numbers of goods are produced but the statistics show an increase in the GDP of the country in that year. Can GDP of a country increase without increasing the number of goods being produced in that country? If yes, then how? If, ‘No’ then why?

[abdulsaboor]

Nominal GDP can because it is not adjusted for inflation.It only shows the total value of goods produced in the country at current prices. Real GDP, which is adjusted for inflation cannot increase without the number of goods produced increasing.