Consider the GDP price index and the CPI, and then choose the correct answer. A. The GDP price index weights each item using information from past expenditure surveys. B. The GDP price index is not an alternative to the CPI as a measure of the cost of living. C. If nominal GDP rises but real GDP remains unchanged, it must be that production has increased. D. The CPI and the GDP price index give us the same value.

The correct answer is letter "C": If nominal GDP rises but real GDP remains unchanged, it must be that production has increased.

Explanation:

The Gross Domestic Product (GDP) is a calculation of the overall economic production of a country's goods and services. In general, GDP is measured annually within one year. Real GDP is equal to the economic output adjusted for the effects of inflation. Nominal GDP equals economic output without the inflation adjustment. Nominal GDP is usually higher than real GDP because inflation is typically a positive number.

Thus, nominal GDP can increase without increasing the real GDP.

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