Answer the Question Based on the Following Price and Output

Multiple Choice

Answer the question based on the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year. Refer to the above data. For the years shown, the growth of:

A) Real GDP exceeds the growth of nominal GDP
B) Nominal GDP exactly reflects increases in real output
C) Nominal GDP overstates increases in real output
D) Nominal GDP understates increases in real output