Real GDP Is Preferred to Nominal GDP as a Measure

question 152

Multiple Choice

Real GDP is preferred to nominal GDP as a measure of economic performance because

• A) nominal GDP uses current prices and thus may over or understate true changes in output.
• B) nominal GDP only includes goods and excludes services.
• C) nominal GDP is not adjusted for population changes.
• D) real GDP accounts for changes in the quality of goods and services produced.

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