When The Olympic Bakery buys flour from a local miller, the amount is included in nominal GDP but is not included in real GDP.

Question

Quizplus · Accepted Answer

Both nominal GDP and real GDP include the value of goods and services produced within a country; the difference is that real GDP is adjusted for inflation, while nominal GDP is not. The purchase of flour by The Olympic Bakery from a local miller would be included in both, reflecting economic activity.

When the Olympic Bakery Buys Flour from a Local Miller