Nominal GDP
A) has been adjusted for changes in the general price level.
B) measures the real level of output in the economy.
C) measures national output on the basis of the current year's prices.
D) tends to rise by a smaller amount than real GDP when the general price level increases.
E) measures changes in the output of intermediate goods and services.

Question

Quizplus · Accepted Answer

Nominal GDP measures national output on the basis of the current year's prices, without adjusting for inflation. This means that it does not reflect changes in the general price level and may overstate economic growth if prices have increased since the previous year. To account for inflation, real GDP is a better measure of changes in output over time.