What Is the Difference Between Nominal and Real GDP

question 219

Multiple Choice

What is the difference between nominal and real GDP?

• A) Nominal GDP is adjusted for changes in the price level;real GDP is not.
• B) Real GDP is adjusted for taxes and transfer payments;nominal GDP is not.
• C) Real GDP is adjusted for changes in the price level;nominal GDP is not.
• D) Nominal GDP is adjusted for depreciation;real GDP is not.
• E) Real GDP is adjusted for depreciation;nominal GDP is not.

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Definitions:

Error Term

A variable in a statistical model that captures the difference between observed and predicted values.

Linear Relationship

A relationship between two variables where the change in one variable is directly proportional to the change in another.

Scatter Chart

A type of graph used to display values for two variables for a set of data, showing the relationship between them.

Variables

Features or characteristics that can take on different values in data collection and analysis.