Current dollar GDP can increase while real GDP decreases.

Question

Quizplus · Accepted Answer

Current dollar GDP is the value of GDP in current dollars, without adjusting for inflation. Real GDP, on the other hand, is adjusted for inflation, so it reflects changes in the quantity of goods and services produced, rather than changes in their prices. If prices were to increase faster than the quantity of goods produced, the current dollar GDP would increase while the real GDP might decrease. This is because the increase in prices would be reflected in the current dollar GDP, but the decrease in the quantity of goods would reduce the real GDP.

Current Dollar GDP Can Increase While Real GDP Decreases