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Nominal GDP and Real GDP
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Nominal GDP and Real GDP
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11. Gross Domestic Product (GDP) and Consumer Price Index (CPI) / Nominal GDP and Real GDP / Problem 3
Problem 3
Why is real GDP generally considered a better measure of changes in production than nominal GDP?
A
Real GDP holds prices constant, allowing for a clearer comparison of production quantities over time.
B
Real GDP includes more components than nominal GDP.
C
Real GDP is adjusted for inflation, while nominal GDP is not.
D
Real GDP measures economic growth, while nominal GDP measures economic decline.
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