If 1987 is the base year,then which statement could be made about the relationship between GDP and real GDP today?

A) Real GDP is higher than GDP
B) GDP is higher than real GDP
C) GDP is equal to real GDP
D) None of the choices are correct

Question

Abbigail Tinoco · Accepted Answer

Final Answer : B, Explanation :  GDP is usually higher than real GDP in current terms when the base year is in the past, due to inflation increasing nominal values over time. Real GDP is adjusted for inflation, reflecting the value of goods and services at the prices of the base year (1987 in this case), which typically results in a lower figure than nominal GDP in a later year.

If 1987 is the base year,then which statement could be made about the relationship between GDP and real GDP today?

A) Real GDP is higher than GDP
B) GDP is higher than real GDP
C) GDP is equal to real GDP
D) None of the choices are correct

Definitions

Learning Objectives

Learning Objectives

Related questions

If 1987 is the base year,then which statement could be made about the relationship between GDP and real GDP today?A) Real GDP is higher than GDPB) GDP is higher than real GDPC) GDP is equal to real GDPD) None of the choices are correct

Definitions

Learning Objectives

Learning Objectives

Related questions

If 1987 is the base year,then which statement could be made about the relationship between GDP and real GDP today?

A) Real GDP is higher than GDP
B) GDP is higher than real GDP
C) GDP is equal to real GDP
D) None of the choices are correct