Changes in the level of prices lead to changes in money GDP but not real GDP.

Name: Changes in the level of prices lead to changes in money GDP but not real GDP.
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Question

Quizplus · Accepted Answer

Money GDP (nominal GDP) changes with price level fluctuations because it measures the value of goods and services at current prices. Real GDP, however, is adjusted for inflation and reflects the actual volume of production, so it remains unaffected by changes in the price level.

Changes in the Level of Prices Lead to Changes in Money