Which of the following statements about nominal GDP and real GDP is correct?
A)Nominal GDP is a better gauge of economic well-being than real GDP.
B)Real GDP is a better gauge of economic well-being than nominal GDP.
C)Real GDP and nominal GDP are equally good measures of economic well-being.
D)Neither nominal nor real GDP provide a measure of economic well-being.

Question

Quizplus · Accepted Answer

Real GDP is a better gauge of economic well-being than nominal GDP because it takes into account the effects of inflation. Nominal GDP only measures the current dollar value of goods and services produced, while real GDP adjusts for inflation and provides a more accurate picture of the economy's productive capacity. Therefore, real GDP is a more meaningful measure of economic well-being over time.

Which of the Following Statements About Nominal GDP and Real