Which of the following is TRUE regarding real GDP?
I. Real GDP is the value of the total production of the country's farms, factories, shops, and offices.
II. Real GDP rises whenever inflation occurs.
III. Real GDP does not measure all that is produced.

Question

Quizplus · Accepted Answer

Real GDP measures the value of all goods and services produced within a country's borders, adjusted for inflation, which includes production from farms, factories, shops, and offices. It does not rise with inflation, as it is inflation-adjusted, and it does not measure all that is produced, such as illegal goods and services or household production.

Which of the Following Is TRUE Regarding Real GDP