Gross domestic product measured in terms of the prices of a fixed, or base, year is
A) current GDP.
B) base GDP.
C) real GDP.
D) nominal GDP.

Question

Quizplus · Accepted Answer

Real GDP measures the value of goods and services produced in an economy in a given year, adjusted for inflation by using the prices of a fixed or base year. This allows for meaningful comparisons of economic performance over time. Current GDP, on the other hand, uses the prices of the current year, thereby reflecting the impact of inflation on the value of goods and services produced. Nominal GDP is the value of goods and services produced in an economy in a given year, using the current market prices. Base GDP is not a commonly used term in economic measurement.

Gross Domestic Product Measured in Terms of the Prices of a Fixed