Real GDP is the production of goods and services valued at constant prices. This is because real GDP attempts to measure the volume of economic activity in an economy by holding prices constant. By doing so, it allows for a comparison of economic activity from one period to another, without the distortion of price changes. Therefore, option B is the correct answer.

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Real GDP Is

Question 24

Multiple Choice

Real GDP is:

A) the production of goods and services valued at current-year prices
B) the production of goods and services valued at constant prices
C) the production of goods and services valued at future-year prices
D) the production of goods and services valued at the ratio of current-year prices to constant prices

Correct Answer: