Real GDP is: Select one: a. GDP based on the current prices, and not adjusted for inflation b. GDP that has been corrected for inflation c. GDP that subtracts out production that damages the environment d. Is GDP that "keeps it 100" (this is a joke and not the answer)

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Business

Camille Murray

4 July, 06:10

Real GDP is: Select one: a. GDP based on the current prices, and not adjusted for inflation b. GDP that has been corrected for inflation c. GDP that subtracts out production that damages the environment d. Is GDP that "keeps it 100" (this is a joke and not the answer)

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Answers (1)

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Ian Ward · Answer 1

b. GDP that has been corrected for inflation

Explanation:

Real gross domestic product (GDP) can be described as a macroeconomic measure that has been adjusted for inflation in order to show the value of goods and services produced in an economy in a particular.

Real GDP is expressed in base-year prices and this is the reason it is usually refereed to as constant dollar GDP, constant price GDP or inflation-corrected GDP because it adjusts for changes in prices due to inflation.

Therefore, the correct option is b. GDP that has been corrected for inflation.

Note that Real GDP is different nominal GDP. Unlike the real GDP, Nominal GDP refers to GDP that is evaluated at current market prices without adjuting or correcting for changes in prices due to inflation.