Item 3 What do economists call GDP that uses constant, unchanging prices? constant GDP real GDP nominal GDP factual GDP

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Business

Holly Clay

24 September, 06:57

Item 3 What do economists call GDP that uses constant, unchanging prices? constant GDP real GDP nominal GDP factual GDP

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Karina Cannon · Answer 1

Economists call GDP that uses constant, unchanging prices as

Real GDP

Explanation:

Real gross domestic product (real GDP for short) is a macroeconomic measure of the value of economic output adjusted for price changes. This adjustment transforms the money-value measure, nominal GDP, into an index for quantity of total output. It is calculated using the prices of a selected base year. To calculate Real GDP, you must determine how much GDP has been changed by inflation since the base year, and divide out the inflation each year. Real GDP accounts for the fact that if prices change but output doesn't, nominal GDP would change. The real economic growth, or real GDP growth rate, measures economic growth as it relates to the gross domestic product (GDP) from one period to another, adjusted for inflation, and expressed in real terms as opposed to nominal terms