CameraIcon
CameraIcon
SearchIcon
MyQuestionIcon


Question

Which of the following best describes the distinction between real GDP and nominal GDP?



A

Nominal GDP is calculated by deflating real GDP; real GDP is unadjusted for inflation

loader
B

Nominal GDP includes intermediate goods; real GDP excludes intermediate goods

loader
C

Nominal GDP uses current prices; real GDP uses constant prices

loader
D

Nominal GDP is calculated every year; real GDP is calculated only occasionally

loader

Solution

The correct option is D

Nominal GDP uses current prices; real GDP uses constant prices


Nominal GDP will increase when prices increase, even if output doesn't change at all. Using constant prices allows GDP to reflect actual changes in production instead of changes in prices.


Economics

Suggest Corrections
thumbs-up
 
0


similar_icon
Similar questions
View More



footer-image