Asked by Annie Vatterott on May 17, 2024
Verified
Which one of the following statements is correct?
A) Real GDP and GDP are always equal in the base year.
B) GDP always exceeds real GDP in the base year.
C) 2009 real GDP will exceed 2008 GDP if 2009 production is greater than 2008 production.
D) Unlike GDP,real GDP includes estimates of voluntary and underground economic activity.
E) If deflation occurs from 2008 to 2009,then the 2009 real GDP must be greater than the 2008 GDP.
Real GDP
Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by a country in real terms.
Base Year
A specific year against which economic growth is measured, serving as a standard comparison for financial indices and economic data.
Economic Activity
All actions that involve producing, trading, selling, and buying goods and services within an economy.
- Understand the principle of the GDP deflator and its role in assessing economic achievement.
Verified Answer
JH
jovette hernandezMay 19, 2024
Final Answer :
A
Explanation :
Real GDP is adjusted for inflation and reflects the value of all goods and services produced in a country in a given year, expressed in the prices of a base year. In the base year, the price level is the same as the current price level, making real GDP and nominal GDP (GDP) equal.
Learning Objectives
- Understand the principle of the GDP deflator and its role in assessing economic achievement.