Real GDP measures the
A) total dollar value of all goods and services produced within the borders of a country using current prices.
B) value of ﬁnal goods and services produced within the borders of a country, adjusted for price changes.
C) total dollar value of all goods and services consumed within the borders of a country, corrected for price changes.
D) value of all goods and services produced in the world, using current prices.

Question

Quizplus · Accepted Answer

Real GDP measures the value of final goods and services produced within the borders of a country, adjusted for price changes (inflation). This means that real GDP accounts for changes in prices over time, allowing for a more accurate comparison of economic output. Option A measures nominal GDP, which does not account for inflation, while option C is incorrect as it measures total consumption rather than production. Option D is also incorrect as it includes the production of all countries, not just one specific country.

Real GDP Measures the