Real GDP is the value of goods and services
A) adjusted only for unanticipated inflation.
B) adjusted only for anticipated inflation.
C) using base-year prices.
D) using current-year prices.

Question

Quizplus · Accepted Answer

Real GDP is calculated using base-year prices, which allows for a comparison of economic output across different time periods without the distortion of price level changes. Adjusting for inflation, anticipated or unanticipated, is not the sole factor in calculating real GDP. Using current-year prices would result in nominal GDP, which could be inflated or deflated based on price level changes.

Real GDP Is the Value of Goods and Services