Suppose that nominal gross domestic product (GDP) increased from $2000 to $2100 from year 1 to year 2. Which of the following scenarios would explain why real GDP neither increased nor decreased between your 1 and year 2?
1
The aggregate price level decreased by 5%
2
The aggregate price level decreased by 2.5%
3
The aggregate price level increased by 5%
4
The aggregate price level decreased by 1%