Final answer:
True, real GDP is a better measure of output than nominal GDP because it accounts for changes in prices and provides a more accurate picture of economic growth over time.
Step-by-step explanation:
The question asks whether real GDP is a better measure of output than nominal GDP. The answer is True.
Nominal GDP is the GDP measured in current prices, while real GDP is adjusted for inflation. Real GDP is considered a better measure of output because it accounts for changes in both prices and quantity of goods and services produced, providing a more accurate picture of economic growth over time.
For example, if nominal GDP increases from year to year, it could be due to an increase in prices rather than an actual increase in output. Real GDP adjusts for inflation and allows for a clearer comparison of economic performance.