Nominal GDP measures the value of all goods and services produced in an economy:

• A. at current market prices, without adjusting for inflation
• B. using purchasing power parity
• C. at constant prices, adjusted for inflation
• D. excluding government spending

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the definition of Nominal GDP. Nominal GDP measures the total market value of all final goods and services produced within a country in a given period, using current prices during the time of measurement.
2. Step 2: Recognize that Nominal GDP does not adjust for changes in the price level or inflation. This means it reflects the value of output at the prices that prevail in the year the output is produced.
3. Step 3: Compare Nominal GDP with Real GDP. Real GDP is adjusted for inflation and is measured at constant prices, whereas Nominal GDP is measured at current market prices without adjusting for inflation.
4. Step 4: Eliminate incorrect options: 'using purchasing power parity' relates to comparing GDP across countries, 'at constant prices, adjusted for inflation' describes Real GDP, and 'excluding government spending' is incorrect because government spending is included in GDP calculations.
5. Step 5: Conclude that the correct description of Nominal GDP is that it measures the value of all goods and services produced in an economy at current market prices, without adjusting for inflation.