Which of the following statements is TRUE?
A) During periods of inflation, nominal GDP increases more rapidly than does real GDP.
B) Nominal values are expressed in constant dollars.
C) Real values are expressed in current dollars.
D) Increases in real GDP are evidence that the distribution of wealth is becoming more equal.

Question

Quizplus · Accepted Answer

During periods of inflation, prices increase, leading to an increase in nominal GDP. However, real GDP adjusts for inflation and measures the actual physical production of goods and services in an economy, so the increase in real GDP is not as rapid as the increase in nominal GDP.

Which of the Following Statements Is TRUE