Evaluating GDP Growth Implications in Economy X

Hard Macroeconomics Gdp And Growth

Consider the following scenario in an economy:

In the first quarter, the nominal GDP of Country X grew at a rate of 8%, while the inflation rate was recorded at 3%. By the second quarter, GDP experienced a significant increase driven by both increased consumption and government spending. Moreover, the central bank implemented a monetary policy to reduce interest rates, fostering an environment conducive to borrowing and investment.

Based on the provided information, which of the following statements most accurately describes the implications of these changes on Country X's real GDP and potential long-term growth?

The growth in nominal GDP indicates that real GDP is also increasing significantly, which suggests sustainable long-term growth.

The disparity between nominal GDP growth and inflation indicates stagnation in real GDP growth, suggesting potential long-term challenges.

The combination of nominal GDP growth and falling interest rates suggests that the real GDP is likely to grow faster than nominal GDP, indicating robust economic expansion.

Hint

Submitted12.5K

Correct7.2K

% Correct58%