Re: Gokhale Model Paper I

Posted by Granpa Simpson on Jun 04, 2014; 8:06pm
URL: http://discussion-forum.276.s1.nabble.com/Gokhale-Model-Paper-I-tp7591016p7591473.html

For Q30) Real GDP=Nominal GDP/Price Level.
now, d(real GDP)=d(Nominal GDP)-d(Price level).
Clearly if d(price level)>d(Nominal GDP), d(real GDP)<0 and hence will shrink. thus option b seems to hold true.