If 2009 prices are used in the calculation of real GDP and inflation occurs between 2009 and 2010, then nominal GDP will be ____ real GDP in 2010.
A) greater than
B) less than
C) equal to
D) unrelated to

Question

Quizplus · Accepted Answer

Nominal GDP is calculated using current year prices, while real GDP is calculated using base year prices (2009 in this case). If inflation occurs, prices in 2010 will be higher than in 2009, making nominal GDP greater than real GDP.

If 2009 Prices Are Used in the Calculation of Real