Real GDP is measured in __________ prices while nominal GDP is measured in _________ prices?
Correct answer: D. base year; current year
- A. foreign; domestic
- B. current year; base year
- C. domestic; foreign
- D. base year; current year
- E. intermediate; final
Explanation
Real GDP uses base-year prices to isolate changes in output from inflation, while nominal GDP uses current-year prices. Thus, real GDP is measured at base-year prices and nominal GDP at current prices.
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