Asked by Emanuela Tigistu on May 16, 2024
Verified
If the real gross domestic product (GDP) for the base year is $4 trillion,then the nominal gross domestic product (GDP) for that year is _____.
A) −$.04 trillion
B) $0.4 trillion
C) $4 trillion
D) $40 trillion
E) $400 trillion
Base Year
A specific year against which economic growth is measured, serving as a standard or benchmark.
Nominal GDP
The market value of all final goods and services produced within a country in a year, measured using current prices.
Real GDP
The value of all goods and services produced within a country adjusted for inflation or deflation.
- Learn about the dissimilarities and terminologies associated with nominal GDP and real GDP.
- Understand the conceptual distinction between measuring GDP using current-year versus base-year prices.
Verified Answer
DP
Darryl PerkinsMay 22, 2024
Final Answer :
C
Explanation :
Nominal GDP for the base year is equal to the real GDP. Therefore, if the real GDP is $4 trillion, then the nominal GDP is also $4 trillion.
Learning Objectives
- Learn about the dissimilarities and terminologies associated with nominal GDP and real GDP.
- Understand the conceptual distinction between measuring GDP using current-year versus base-year prices.