"If a recession is so severe that the price level declines, then we know that both real GDP and nominal GDP must decline."
A. Agree. If both output and prices are falling, then both real GDP and nominal GDP will fall.
B. Disagree. Real GDP falls if output falls. Nominal GDP can increase if output falls and prices fall.
C. Agree. If prices fall, real GDP and nominal GDP will both fall if output increases.
D. Disagree. Real GDP falls if output falls. Nominal GDP can increase if output falls and prices rise.
Answer: A. Agree. If both output and prices are falling, then both real GDP and nominal GDP will fall.