Ask Question
BusinessBusiness
3 October, 10:30

Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP does not include the value of intermediate goods and services, but nominal GDP does. Real GDP is not influenced by price changes, but nominal GDP is. Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.

+4
Answers (1)
  1. 3 October, 13:43
    0
    Answer: Option (b) is correct.

    Explanation:

    Real GDP is totally based on the base year price level. This means that base year price level remains the same over all the periods. Therefore, Real GDP is generally not affected by the changes occur in the price level. Hence, it only includes the changes in output.

    Nominal GDP takes into account the effect of changes in the price level. Therefore, it is affected by the changes in the price level and it is also measured in current U. S dollars. Hence, it doesn't show the true value of the goods and services produced in a given year.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP does not include the value of intermediate ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
The required return on equity for an all-equity firm is 10.0 percent. They currently have a beta of one and the risk-free rate is 5 percent and the market risk premium is 5 percent.
Answers (1)
Gretchen offers $100 to anyone who can return her lost dog, Sparky. Haley returns the dog and requests the money. Gretchen says that there is no binding contract. Which of the following is true regarding Gretchen's statement? A.
Answers (1)
an assembly operation at a furniture factory, six employees assembled an average of 450 standard dining chairs per five - ay week. What is the labor productivity of this operation? a. 90 chairs/worker/day b. 75 chairs/worker/day c.
Answers (1)
What percent of the money that a typical modern bank invests comes from borrowing?
Answers (1)
The preparation of a comprehensive master budget culminates with the preparation of the: Production budget. Cash budget. Capital investment budget. Strategic budget.
Answers (1)
New Questions in Business
What causes changes from one phase of the business cycle to another?
Answers (1)
Worthy Ships initially issued 400,000 shares of $1 par stock for $2,000,000 in 2021. In 2023, the company repurchased 40,000 shares for $400,000. In 2024. 20,000 of the repurchased shares were resold for $320,000.
Answers (1)
A new mall will be constructed in a large city. Why are business owners most likely viewing a topography map before construction? a. to find flat areas of land for building b. to identify key landforms in the area c.
Answers (1)
True or False? An environmental office is one that is concerned with managing resources so these resources do not negatively affect the environment.
Answers (2)
Bruno's stock should return 14 percent in a boom, 11 percent in a normal economy, and 4 percent in a recession. The probabilities of a boom, normal economy, and recession are 8 percent, 90 percent, and 2 percent, respectively.
Answers (1)
Home » Business » Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP does not include the value of intermediate goods and services, but nominal GDP does. Real GDP is not influenced by price changes, but nominal GDP is.
Sign Up Forgot Password?