lesson: If you woke up in the morning and found that nominal GDP had doubled overnight, what statistic would you need to check before you began to celebrate? Why?
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Nominal GDP is a measure of total goods and services produced in an economy at current price level.
Real GDP is a measure of total good and services produced in an economy at a base year price level.
If there is an increase in nominal GDP then this growth can be due to increase in production or due to increase in prices. Increase in production is a news which should be celebrated but increase in GDP due to increase in price is not a good sign for the economy. If real GDP increases then it is news for celebration as real GDP increases only when there is increase in production.
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