Real GDP refers to nominal GDP
A)minus gifts to other countries.
B)minus total unemployment compensation.
C)adjusted for price changes.
D)adjusted for unemployment changes.

Question

Quizplus · Accepted Answer

Real GDP is adjusted for price changes using a price index such as the consumer price index (CPI) or the GDP deflator. It measures the actual value of goods and services produced in an economy over a specific time period, regardless of changes in prices. Options A and B are incorrect as gifts to other countries and total unemployment compensation are not subtracted from nominal GDP to calculate real GDP. Option D is incorrect as unemployment changes are not taken into account when calculating real GDP.

Real GDP Refers to Nominal GDP