BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Nominal GDP ____ = Real GDP
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Inflation
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Unemployment
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Imports
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Exports
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Explanation:
Detailed explanation-1: -Nominal GDP reflects the raw numbers in current dollars unadjusted for inflation. Real GDP adjusts the numbers by fixing the currency value, thus eliminating any distortion caused by inflation or deflation.
Detailed explanation-2: -The GDP deflator is (nominal GDP/real GDP) x 100, and it tells you how much inflation is. For example, if nominal GDP is $105 and real GDP is $100, then inflation is 5%.
Detailed explanation-3: -To convert nominal economic data from several different years into real, inflation-adjusted data, the starting point is to choose a base year arbitrarily and then use a price index to convert the measurements so that they are measured in the money prevailing in the base year.
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