Real GDP is adjusted for inflation by valuing goods and services at the prices of a reference base year. This provides a way to measure the actual growth in production over time, rather than changes in prices.

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Real GDP Equals

Question 67

Multiple Choice

Real GDP equals

A) nominal GDP minus the value of intermediate goods.
B) nominal GDP adjusted for the depreciation of capital.
C) the value of final goods and services produced in a given year when valued at the prices of a reference base year.
D) nominal GDP minus the value of goods exported to foreign countries.
E) nominal GDP minus the rate of inflation.

Correct Answer: