Question

    What is the difference between Nominal GDP and Real

    GDP?
    A Nominal GDP is measured at factor cost, Real GDP at market price Correct Answer Incorrect Answer
    B Nominal GDP is measured at constant prices, Real GDP at current prices Correct Answer Incorrect Answer
    C Nominal GDP is measured at current prices, Real GDP at constant prices Correct Answer Incorrect Answer
    D There is no difference between Nominal and Real GDP Correct Answer Incorrect Answer

    Solution

    Nominal GDP is measured at current prices, whereas Real GDP is measured at constant prices to account for inflation.

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