Which of the following indicate that the goods and services are evaluated at some constant set of prices?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Real GDP
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Real GDP measures the value of all final goods and services at constant prices, i.e., prices of a base year.
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It removes the effect of inflation, showing the actual growth in output or production.
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In contrast: Nominal GDP measures value at current prices, which includes inflation.