In determining real GDP economists adjust the nominal GDP by using the:
A)national productivity index.
B)wholesale (producer) price index.
C)GDP price index.
D)consumer price index.

Question

Quizplus · Accepted Answer

The GDP price index, also known as the GDP deflator, is a measure of price inflation that takes into account all goods and services produced in an economy. It is used to adjust nominal GDP to arrive at real GDP, which reflects changes in output rather than changes in prices. The consumer price index (D) is a measure of price inflation that only reflects changes in the prices of goods and services consumed by households, and is not as comprehensive as the GDP deflator. The national productivity index (A) and wholesale (producer) price index (B) are not commonly used in the calculation of real GDP.

In Determining Real GDP Economists Adjust the Nominal GDP by Using