Inflating GDP refers to the fact that real GDP may be greater than nominal GDP if the price level for the year in question is less than 100.

Question

Quizplus · Accepted Answer

Real GDP is calculated using the prices of a base year, while nominal GDP is calculated using the prices of the current year. If the price level for the year in question is less than 100, then the prices of goods and services are lower than they were in the base year. This means that real GDP will be greater than nominal GDP, as the same quantity of goods and services will be worth more in real terms.

Inflating GDP Refers to the Fact That Real GDP May