GDP That Has Been Adjusted for Changes in the Price

question 37

Multiple Choice

GDP that has been adjusted for changes in the price level is called:

• A)​nominal GDP.
• B)​real GDP.
• C)​personal income.
• D)​net GDP.

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Definitions:

Relative-price Variability

The fluctuation and differences in price levels of goods and services relative to each other over time.

Efficiently Allocate

The process of distributing resources in a manner that maximizes the effectiveness or utility of their use.

Monetary Neutrality

The economic theory that changes in the money supply only affect nominal variables and have no effect on real variables such as output or unemployment in the long run.

Fisher Effect

An economic theory proposing that the real interest rate is independent of monetary measures, specifically that the nominal interest rate adjusts to expected inflation.