Nominal GDP measures the value of goods and services produced in an economy at current market prices, while real GDP adjusts for inflation. Since prices tend to rise over time, nominal GDP will generally increase more rapidly than real GDP. Therefore, nominal GDP has historically increased more rapidly than real GDP.

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U.S.nominal GDP

Question 155

Multiple Choice

U.S.nominal GDP:

A) has historically increased more slowly than real GDP.
B) has historically increased more rapidly than real GDP.
C) includes an estimate of the value of leisure time.
D) includes an estimate of underground productive activity.
E) has historically increased at the same pace as real GDP.

Correct Answer: