Nominal gross domestic product
A) is a measure of the overall level of prices.
B) measures the value of ﬁnal output produced within a nation in one year, using current prices.
C) measures the value of ﬁnal output produced within a nation in one year, adjusted for changing prices.
D) only changes when the level of output changes.

Question

Quizplus · Accepted Answer

Nominal gross domestic product is a measure of the value of final output produced within a nation in one year, using current prices. It does not take into account changes in prices, so it is not adjusted for inflation. Therefore, nominal GDP can increase even if there is no increase in the level of output, due to inflation.

Nominal Gross Domestic Product