The Difference Between Nominal GDP and Real GDP Is That

question 40

Multiple Choice

The difference between nominal GDP and real GDP is that nominal GDP

• A) measures the total value of all final goods and services, whereas real GDP measures the value of all goods and services, whether they are intermediate or final.
• B) measures a country's production of final goods and services at current prices, whereas real GDP measures a country's production of all final goods and services at fixed historical prices.
• C) is measured in dollar terms whereas real GDP is measured in terms of numbers of goods and services produced.
• D) measures a country's production of final goods and services at fixed prices, whereas real GDP measures a country's production of all final goods and services at current market prices.

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Definitions:

Savings Account

A savings account in a bank or financial institution that guarantees the safety of the deposited capital while offering a low interest rate.

Interest Rate

The cost incurred by a borrower from a lender for utilizing assets, shown as a percentage of the principal sum.

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in investment and financial analysis.

Present Value

The current worth of a future sum of money or stream of cash flows given a specific rate of return.