<p>Yes. Suppose that only two people exist, Ann and Bob, and the whole money supply is a gold coin in the hands of Ann. By working hard, Ann can produce A-widgets, and Bob can produce B-widgets. Suppose Bob produces a B-widget, and Ann buys his widget by giving him the coin for it. GDP increases. Then Ann produces an A-widget, and Bob buys it. Ann has the coin once more, and GDP has increased. This can be repeated arbitrarily many times. The point is that the amount of possible transactions with a limited amount of money is still unlimited.</p>

CC BY-SA 4.0
2023-11-10T08:50:44.430Z
2023-11-10T08:50:44.430Z
Michael Greinecker
<p>If no new type of consumer product is invented this year compared to last year and no new money is printed this year (i.e. the same quantity of money exists in the economy as last year), under what conditions can GDP still rise?</p>

CC BY-SA 4.0
2023-11-10T07:22:25.327Z
Assume you have a very simple economy only producing bananas. If your banana crop produces more bananas compared to last year, your economy grew. No innovation, no invention, no money. It's just the amount of goods (and services) produced really, which can vary for all sorts of reasons.
AKdemy
CC BY-SA 4.0
2023-11-11T02:22:54.780Z
@AKdemy is referring to real GDP, which is the correct measure: we have more bananas to eat, and that is an improvement. Note: it is possible that nominal GDP (the money spent on bananas) might stay the same, but that just means that bananas are cheaper.
Daniel
<gdp>
Can GDP still rise if no new products are invented and if no new money is printed?
NUnited
# Can GDP still rise if no new products are invented and if no new money is printed?

(Asked by: username_0 on 2023-11-09)

If no new type of consumer product is invented this year compared to last year and no new money is printed this year (i.e. the same quantity of money exists in the economy as last year), under what conditions can GDP still rise?

**Tags:** gdp

> **Comments:**
> **username_1**: Assume you have a very simple economy only producing bananas. If your banana crop produces more bananas compared to last year, your economy grew. No innovation, no invention, no money. It's just the amount of goods (and services) produced really, which can vary for all sorts of reasons.  
> **username_2**: @username_1 is referring to real GDP, which is the correct measure: we have more bananas to eat, and that is an improvement. Note: it is possible that nominal GDP (the money spent on bananas) might stay the same, but that just means that bananas are cheaper.  

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## 1 answers

### Answer by username_3 on 2023-11-10. Score: 3

Yes. Suppose that only two people exist, Ann and Bob, and the whole money supply is a gold coin in the hands of Ann. By working hard, Ann can produce A-widgets, and Bob can produce B-widgets. Suppose Bob produces a B-widget, and Ann buys his widget by giving him the coin for it. GDP increases. Then Ann produces an A-widget, and Bob buys it. Ann has the coin once more, and GDP has increased. This can be repeated arbitrarily many times. The point is that the amount of possible transactions with a limited amount of money is still unlimited.


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