Which statement best describes the difference between Nominal and Real GDP? Group of answer choices Nominal GDP is Real GDP that has been adjusted to remove the distorting effects of inflation. Real GDP is calculated using current market prices, while Nominal GDP is calculated using the average prices of the last 5 years. Nominal GDP is calculated using current market prices, while Real GDP is calculated using the prices of the previous year. Real GDP is Nominal GDP which has been adjusted to remove the distorting effects of inflation.
Which statement best describes the difference between Nominal and Real GDP? Group of answer choices Nominal GDP is Real GDP that has been adjusted to remove the distorting effects of inflation. Real GDP is calculated using current market prices, while Nominal GDP is calculated using the average prices of the last 5 years. Nominal GDP is calculated using current market prices, while Real GDP is calculated using the prices of the previous year. Real GDP is Nominal GDP which has been adjusted to remove the distorting effects of inflation.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter7: Macroeconomic Measurements, Part Ii: Gdp And Real Gdp
Section: Chapter Questions
Problem 2QP
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Question
Which statement best describes the difference between Nominal and Real GDP ?
Group of answer choices
Nominal GDP is Real GDP that has been adjusted to remove the distorting effects of inflation.
Real GDP is calculated using current market prices , while Nominal GDP is calculated using the average prices of the last 5 years.
Nominal GDP is calculated using current market prices, while Real GDP is calculated using the prices of the previous year.
Real GDP is Nominal GDP which has been adjusted to remove the distorting effects of inflation.
Expert Solution
Step 1
Nominal GDP measures the value of goods and services at current market prices. Real GDP measures the value of goods and services at base-year prices. Nominal GDP is unadjusted GDP for inflation and real GDP is adjusted for inflation.
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