If the nominal GDP of an economy increased while the real GDP remained constant, what can be inferred about the price level in that economy?

When nominal GDP increases while real GDP stays the same, it means that the overall price level in the economy has gone up. Nominal GDP measures the total value of goods and services produced at current prices, while real GDP adjusts for inflation and reflects the true growth in terms of volume. If real GDP is constant, the only reason for the increase in nominal GDP is rising prices. For example, if a country produces the same number of cars as last year, but the price of each car has increased, the nominal GDP will rise, but the real GDP will not change. This situation indicates that inflation is occurring in the economy.