Question

Why is real GDP more accurate than nominal GDP?

Group of answer choices

A) It is adjusted for price changes

B) It is adjusted for depreciation

C) It includes unpaid and paid work

D) It includes unrecorded business

Answer 1

A) Real GDP is more accurate than nominal GDP because it takes into account the impact of inflation on the economy, allowing for a more meaningful comparison of economic output over time. Additionally, real GDP provides a better measure of changes in living standards as it reflects changes in the quantity and quality of goods and services produced.

Step-by-step explanation: