Historically, real GDP has increased less rapidly than nominal GDP because:
A)price indices have not reflected improvements in product quality.
B)the general price level has increased.
C)technological progress has resulted in more efficient production.
D)the general price level has declined.

Question

Quizplus · Accepted Answer

Nominal GDP is measured using current prices, so it increases with inflation, while real GDP is adjusted for inflation, reflecting only actual growth in volume of goods and services.

Historically, Real GDP Has Increased Less Rapidly Than Nominal GDP