Suppose a Small Economy Produces Only HD TV Sets

Multiple Choice

Suppose a small economy produces only HD TV sets. In year 1, 100,000 sets are produce and sold at a price of $1,200 each. In year 2, 100,000 sets are produced and sold at a price of $1,000 each. As a result:

A) Nominal GDP stays constant, while real GDP decreases
B) Nominal GDP decreases, while real GDP stays constant
C) Nominal GDP and real GDP both decrease
D) Nominal GDP decreases, and real GDP decreases even more