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    Question

    What is the primary difference between nominal GDP and

    real GDP?
    A Nominal GDP is adjusted for inflation, while real GDP is not. Correct Answer Incorrect Answer
    B Real GDP is adjusted for inflation, while nominal GDP is not. Correct Answer Incorrect Answer
    C Nominal GDP measures total value of goods and services at base year prices. Correct Answer Incorrect Answer
    D Real GDP measures total value of goods and services at current prices. Correct Answer Incorrect Answer
    E There is no difference between nominal GDP and real GDP. Correct Answer Incorrect Answer

    Solution

    Real GDP is adjusted for inflation, while nominal GDP is not. Real GDP reflects the value of all goods and services at constant base year prices, whereas nominal GDP reflects current year prices.

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