What is the difference between Nominal GDP and Real GDP?
a. Real GDP only measures the production of real goods and excludes services of any kind.
b. Real GDP is a figure adjusted for exchange rate differences among countries.
c. Real GDP is a figure adjusted for inflation.
d. There is no difference at all. Real GDP is a synonym for Nominal GDP.
e. Real GDP measures goods and services produced within a nation's borders, and nominal GDP measures goods and services produced by domestic resources anywhere in the world
.C
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How does a rise in the federal funds rate affect aggregate demand, real GDP, and the price level?
What will be an ideal response?
In the figure above, if the interest rate is 8 percent, people demand $0.1 trillion
A) less money than the quantity supplied and the interest rate will rise. B) less money than the quantity supplied and the interest rate will fall. C) more money than the quantity supplied and the interest rate will fall. D) more money than the quantity supplied and the interest rate will rise.
Which of the following is least likely to enhance central bank credibility?
A) "town meetings" on the topic of monetary policy B) policy makers' expertise C) independence from short-run political influences D) accurate measurement of macroeconomic variables
Which of the following mechanisms helps output to return to potential after a demand shock?
a. Change in business mentality b. Change in nominal wage rate c. Large changes in the capital stock d. Inability of the price level to change e. Change in inventories