If the nominal GDP increases while the price index also rises, it is always indicative of real economic growth.

When we talk about nominal GDP, we are referring to the total value of all goods and services produced in a country without adjusting for inflation. If both nominal GDP and the price index increase, it does not automatically mean that the economy is growing in real terms. This is because the rise in the price index suggests that prices are going up, which can make it seem like there's more economic activity when, in fact, it might just be that things cost more. For example, if a country produces the same amount of goods as last year but prices have increased, nominal GDP may rise, but real GDP, which adjusts for price changes, could remain the same or even fall. Therefore, to determine true economic growth, we need to look at real GDP, which accounts for inflation and gives a clearer picture of whether the economy is truly expanding.