If prices increased, we need to adjust nominal GDP values to give us a measure of GDP for various years in constant-dollar terms. We refer to that adjustment as:
A) Inflating GDP
B) Deflating GDP
C) Compounding GDP
D) Indexing GDP

Question

Quizplus · Accepted Answer

When we adjust nominal GDP values to give us a measure of GDP for various years in constant-dollar terms, we are "deflating GDP." This involves accounting for inflation and adjusting for the changes in prices between different years.

If Prices Increased, We Need to Adjust Nominal GDP Values