Nominal GDP may be used to compare:
A)the dollar amount of final goods produced in different years.
B)the price of final goods times the number of goods produced in one year.
C)output if prices are increasing.
D)living standards among different countries.

Question

Quizplus · Accepted Answer

Nominal GDP measures the dollar value of final goods and services produced in a given year, without adjusting for inflation. Therefore, it can be used to compare the dollar amount of final goods produced in different years. However, it cannot be used to compare output if prices are increasing, as this would require adjusting for inflation using real GDP. It also cannot be used to compare living standards among different countries, as this would require adjusting for differences in population size and purchasing power through measures such as GDP per capita or purchasing power parity.

Nominal GDP May Be Used to Compare