The difference between nominal GDP and real GDP is; A. nominal GDP measures actual productivity B. nominal GDP adjusts for inflation C. real GDP adjusts for inflation D. real GDP excludes imports and exports

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Business

Jaida

3 February, 20:07

The difference between nominal GDP and real GDP is; A. nominal GDP measures actual productivity B. nominal GDP adjusts for inflation C. real GDP adjusts for inflation D. real GDP excludes imports and exports

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Answers (1)

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Jadyn Brock · Answer 1

C. real GDP adjusts for inflation

Explanation:

Real GDP is a measure of a countries production in a given year adjusted for inflation. Real GDP is expressed in base-year prices. It measures inflation since the selected base year. Real GDP provides a more accurate measure of output as it considers changes in prices level. Without real GDP, a country GDP may appear to be growing, whereas its prices that have increased.

Nominal GDP is a valuation of all goods and services produced in a country in a given year using the current prices. The nominal GDP figure is usually higher that of real GDP as it incorporates both growth and prices.