Price indexes allow us to convert __________ measures of output into _________ measures of output, because an increase in that would mean economic growth.
A) nominal; real
B) real; nominal
C) perceived; real
D) nominal; perceived

Question

Quizplus · Accepted Answer

Price indexes allow us to adjust nominal measures of output for changes in prices and convert them into real measures of output. An increase in real output would signify economic growth, while an increase in nominal output may be due to inflation rather than actual growth. Therefore, converting nominal measures to real measures using price indexes is necessary to accurately measure economic growth.

Price Indexes Allow Us to Convert __________ Measures of Output