Question

Which measure of GDP represents changes in the quantity of goods and services produced in the economy, holding prices constant?

A) Nominal GDP.
B) Real GDP.
C) Net national product.
D) None of the above. All GDP measures represent changes in both prices and quantities.

Answer 1

Real GDP represents changes in the quantity of goods and services produced in the economy, holding prices constant.

Step-by-step explanation:

The measure of GDP that represents changes in the quantity of goods and services produced in the economy, holding prices constant, is Real GDP. Real GDP takes into account changes in prices over time by using a price index to adjust the GDP figure. This allows economists to focus on the actual changes in production rather than changes in prices.