Choose the correct statement.

Question

Quizplus · Accepted Answer

Nominal GDP is the value of all goods and services produced in a country at current market prices, whereas real GDP is the value of all goods and services produced in a country adjusted for inflation. Therefore, nominal GDP is not a more precise name for real GDP. Additionally, A and E are incorrect because an increase in nominal GDP does not necessarily mean an increase in real GDP, and an increase in average prices would cause an increase in nominal GDP but not necessarily real GDP. C is also incorrect because the change in production is measured by comparing real GDP in one year with real GDP in the previous year, not nominal GDP.

Choose the Correct Statement