Question

The problem with using nominal GDP as opposed to real GDP as a measure of output is that

A
nominal GDP is affected by the inflation rate.
B
nominal GDP does not account for leisure time.
C
real GDP does not count unintended expenditures.
D
all of the above.

Answer 1

The problem with using nominal GDP as opposed to real GDP as a measure of output is that nominal GDP is affected by the inflation rate.

Step-by-step explanation:

The problem with using nominal GDP as opposed to real GDP as a measure of output is that nominal GDP is affected by the inflation rate. When the prices of goods and services rise, nominal GDP will increase even if the actual level of output remains the same. On the other hand, real GDP adjusts for changes in the price level, providing a more accurate measurement of the actual level of output in a nation.