Why has nominal GDP increased historically more rapidly than real GDP in the United States?
A)because of inflation
B)because of deflation
C)because of statistical discrepancies
D)because of high interest rates

Question

Why has nominal GDP increased historically more rapidly than real GDP in the United States?
A)​because of inflation
B)​because of deflation
C)​because of statistical discrepancies
D)​because of high interest rates

Quizplus · Accepted Answer

Nominal GDP includes the effects of inflation, while real GDP is adjusted for inflation to provide a more accurate measure of economic growth. Therefore, if inflation is present, nominal GDP will increase more rapidly than real GDP.

Why Has Nominal GDP Increased Historically More Rapidly Than Real