Which of the following is a true statement about real and nominal GDP?
A)If nominal GDP increases from one year to the next,we know that production of goods and services has risen.
B)Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and service year after year.
C)Increases in average prices do not affect the calculation of nominal GDP.
D)If real GDP increases from one year to the next,we know that production of goods and services has risen.

Question

Quizplus · Accepted Answer

Real GDP is adjusted for changes in prices, so an increase in real GDP means that there has been an actual increase in the production of goods and services. Nominal GDP, on the other hand, includes the effects of price changes and may not accurately reflect changes in production.

Which of the Following Is a True Statement About Real