Real GDP is gross domestic product measured
A) at a constant output level but at current prices.
B) in current dollars.
C) in the prices of a base year.
D) as the difference between the current year's GDP and last year's GDP.

Question

Quizplus · Accepted Answer

Real GDP is measured in the prices of a base year in order to adjust for inflation and provide a more accurate picture of economic growth. Option A refers to nominal GDP, which is GDP measured at current prices but does not account for changes in output. Option B is also referring to nominal GDP. Option D is not an accurate description of how GDP is calculated.

Real GDP Is Gross Domestic Product Measured