Real gross domestic product is a measure of the
A) average price level in the economy.
B) value of ﬁnal output produced within a country in one year, using current prices.
C) value of ﬁnal output produced within a country in one year, adjusted for changing prices.
D) total value of available resources in a nation.

Question

Quizplus · Accepted Answer

Real gross domestic product (GDP) is a measure of the value of all final goods and services produced within a country in a given period of time, usually one year, adjusted for inflation. This means that it takes into account changes in prices over time, allowing for a more accurate representation of the economy's growth or contraction. Real GDP is a better indicator of economic performance than nominal GDP (which uses current prices) because it accounts for changes in the price level, which can be influenced by factors such as inflation or deflation. Option A is incorrect because it refers to the consumer price index, which measures the average price level of goods and services purchased by households. Option B is incorrect because it refers to nominal GDP, which does not adjust for inflation. Option D is incorrect because it is a vague and unclear statement that does not accurately describe GDP.

Real Gross Domestic Product Is a Measure of the