The Gross Domestic Product of a Nation

question 41

Multiple Choice

The gross domestic product of a nation:

• A) is a flow variable.
• B) is a stock variable.
• C) could either be a flow variable or a stock variable depending on the time period considered.
• D) could either be a flow variable or a stock variable depending on the share of personal consumption.

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Definitions:

Real GDP

The calculation of a nation's economic production accounting for variations in prices, representing the actual value of all goods and services generated.

Nominal GDP

Nominal GDP refers to the market value of all final goods and services produced within a country in a given period, using current prices without adjusting for inflation.

Real GDP

Gross Domestic Product adjusted for inflation, giving an accurate measure of an economy's size and how it's growing over time.

GDP Deflator

A measure that reflects the prices of all domestically produced goods and services in an economy.