Which statement best describes real GDP?
A) Real GDP evaluates, at current prices, all goods and services produced in a base year.
B) Real GDP evaluates, at base-year prices, all goods and services produced in the current year.
C) Real GDP evaluates, at current prices, a current-year basket of goods and services.
D) Real GDP evaluates, at current prices, a base-year basket of goods and services.

Question

Quizplus · Accepted Answer

Real GDP is calculated by valuing all the goods and services produced in the current year at the prices that prevailed in a base year, thus adjusting for inflation and providing a more accurate measure of economic growth.

Which Statement Best Describes Real GDP