Asked by virendra kumar on May 17, 2024
Verified
Historically,real GDP has risen less rapidly than nominal GDP because
A) exports to foreign nations have risen more rapidly than imports.
B) the general price level has fallen.
C) technological progress has resulted in more efficient production.
D) the general price level has risen.
E) price indices have not reflected improvements in product quality.
Real GDP
Gross Domestic Product adjusted for inflation, representing the value of all goods and services produced by an economy in a given year in constant prices.
Nominal GDP
The gross domestic product measured at current market prices, without adjusting for inflation, representing the value of goods and services produced.
- Recognize the connection between nominal GDP, real GDP, and the GDP deflator as measures of economic vitality.
- Grasp how changes in productivity and price levels affect economic indicators like GDP and national income.
Verified Answer
MZ
Madina ZemarialaiMay 20, 2024
Final Answer :
D
Explanation :
Real GDP is adjusted for inflation, so if the general price level has risen (as measured by a price index such as the Consumer Price Index), this would cause nominal GDP to increase more than real GDP.
Learning Objectives
- Recognize the connection between nominal GDP, real GDP, and the GDP deflator as measures of economic vitality.
- Grasp how changes in productivity and price levels affect economic indicators like GDP and national income.