Question

Real GDP is GDP adjusted for changes in:

A) overall employment levels.
B) the level of unemployment.
C) overall output levels.
D) the level of the interest rate.
E) overall price levels.

Answer 1

Real GDP is GDP adjusted for changes in the overall price levels that occur between two periods of time. It allows economists to determine the true level of economic activity in a country.

Step-by-step explanation:

Real GDP is GDP adjusted for changes in the overall price levels that occur between two periods of time. It is important to adjust nominal GDP for inflation or deflation to arrive at real GDP, which is a more accurate measure of the actual level of output in a nation.

In simpler terms, real GDP accounts for changes in prices, allowing economists to determine the true level of economic activity in a country.