Question

34.

Question 34 of 60 > The difference between nominal GDP and real GDP is that nominal GDP: O measures a country's production of finished goods and services at fixed prices, whereas real GDP measures a country's production of all finished goods and services at current market prices. measures the total value of only finished goods and services, whereas real GDP measures the value of all goods and services, both intermediate and finished. measures a country's production of finished goods and services at current market prices, whereas real GDP measures a country's production of finished goods and services at the same prices in all years. O is measured in terms of numbers of goods and services produced, whereas real GDP is measured in dollar terms.

Answer 1

Gross domestic product is defined as the total market value of all goods and services produced within the country during a time period.

Nominal GDP is the measure of value of final goods and services produced within a country at the current market prices. It therefore takes into account the price changes, money supply and inflation and interest rates changes. Real GDP is the measure of a country's output in terms of the value of goods and services, governement spending and exports of the country. It is adjusted for inflation or deflation by converting the prices into base year prices.

Option C is the right answer as nominal GDP is measured in the current market prices and real GDP is measured in the same prices or fixed prices in order to adjust for the inflation or deflation effects on the goods and services.

Option A is not the answer as it has revered the defination of nominal and real GDP.

Option B is not correct as real and nominal GDP are concerned with the fixed and market prices respectively and not with the value of final and intermediate goods.

Option D is not right as nominal GDP is not the measure of the number of goods and services and neither is real GDP measured in dollars alone.