To compare the change in physical production (GDP) between 2000 and 2006, we should compare ______ GDP in 2000 with ______ GDP in 2006.

Question

Quizplus · Accepted Answer

To compare the change in physical production (GDP) between two years, it is important to use real GDP, which adjusts for inflation. Therefore, we should compare real GDP in 2000 with real GDP in 2006. Using nominal GDP, which includes inflationary effects, would not accurately reflect the actual change in physical production. Similarly, using current dollar GDP, which reflects the GDP in the prices of the respective years, would be affected by inflationary effects and would not give an accurate comparison. Therefore, option A, using real GDP for both years, is the best choice.

To Compare the Change in Physical Production (GDP) Between 2000