CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

If prices have risen by 5% in one year, real output ______
A. must have risen by less than 5% in that same year.
B. must have risen by more than 5% in that same year.
C. may have changed by any amount in that same year.
Explanation: The percentage change in real output equals the percentage change in nominal output less the percentage change in the price level. We cannot know how much real output changed without knowing the change in nominal output, too.

User Contributed Comments 2

User Comment
iceluke just read carefully --> if inflationis up x.x % you dont know the real output without the nominal
bidisha Nominal= real + inflation
On 1 variable is given, inflation. We need to know real before we can solve the equation.
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