Real GDP and nominal GDP differ because the real GDP:
A)is adjusted for changes in the volume of intermediate transactions.
B)includes the economic effects of international trade.
C)has been adjusted for changes in the price level.
D)excludes depreciation charges.

Question

Quizplus · Accepted Answer

Real GDP is adjusted for changes in the price level through the use of a GDP deflator, which accounts for inflation or deflation. Nominal GDP, on the other hand, reflects the current prices of goods and services without any adjustment for changes in the price level.

Real GDP and Nominal GDP Differ Because the Real GDP