In what way does nominal GDP differ from real GDP?
A)Nominal GDP tends to increase when total production of output in the economy increases, while real GDP does not.
B)Nominal GDP is measured in base-year prices, while real GDP is measured in current-year prices.
C)Nominal GDP is measured in current-year prices, while real GDP is measured in base-year prices.
D)Nominal GDP does not exclude taxes paid to the government, while real GDP does.

Question

Quizplus · Accepted Answer

Nominal GDP is measured in current-year prices, while real GDP is measured in base-year prices. This adjustment for inflation allows for a more accurate comparison of economic output over time, as it reflects changes in the quantity of goods and services produced, rather than changes in their prices.

In What Way Does Nominal GDP Differ from Real GDP