Economics Real Vs Nominal Gdp Questions
The relationship between inflation and nominal GDP growth is that inflation directly affects nominal GDP growth. Inflation refers to the increase in the general price level of goods and services over time, while nominal GDP measures the total value of all goods and services produced in an economy at current market prices. As prices increase due to inflation, the nominal GDP also increases, even if there is no real increase in the production of goods and services. Therefore, inflation can contribute to nominal GDP growth, but it does not necessarily indicate an increase in the real output or economic well-being of a country.