Question

A primary difference between Nominal GDP and Real GDP is that:

Real GDP is adjusted for unemployment
a
b Nominal GDP adjusts for inflation
с
d
Real GDP uses average prices in its calculation of GDP
Nominal GDP uses the actual prices of the products in calculating GDP

Answer 1

Nominal GDP uses actual prices, Real GDP adjusts for inflation and uses constant base-year prices. Real GDP is a more accurate measure of economic growth over time.

Step-by-step explanation:

The primary difference between Nominal GDP and Real GDP is that Nominal GDP uses the actual prices of the products in calculating GDP, while Real GDP adjusts for inflation. Nominal GDP measures the value of goods and services produced in an economy using current market prices, whereas Real GDP adjusts for changes in price levels by using constant base-year prices. This allows us to compare the GDP of different years without the influence of price changes. Real GDP is a more accurate measure of economic growth over time.

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