2.6 Real Vs. Nominal GDP

nominal GDP is same as

• real GNP

• GNP less net factor income from abroad

• GDP at constant prices

• GDP at current prices

real GDP is same as

• nominal GNP

• GDP at current prices

• GDP at constant prices

• GNP less net factor income from abroad

Real GDP is obtained by

• Nominal GDP minus GDP deflator.

• Nominal GDP divided by GDP deflator multiplied by 100.

• Nominal GDP multiplied by price level.

• Nominal GDP divided by CPI.

Real GDP evaluates _____ production at _____ prices.

• current; past

• past; current

• past; past

• current; current

The major difference between real and nominal gross domestic product (GDP) is that real GDP

• excludes government transfer payments

• excludes imports

• is adjusted for price-level changes using a price index

• measures only the value of final goods and services that are consumed

• measures the prices of a market basket of goods purchased by a typical urban consumer

The table above shows the nominal gross domestic product (GDP) and the price index for an economy during the period 2012 and 2013. Which of the following would have occurred from 2012 to 2013?

• Real GDP decreased by 20%.

• Real GDP decreased by 10%.

• Real GDP increased by 20%.

• Real GDP increased by 10%.

• Real GDP did not change.

According to the data above, in which year was real gross domestic product (GDP) the largest?

• 1980

• 1990

• 2000

• 2010

• 2015

The Gross Domestic Product measured in current prices describes what?

• Real GDP

• Current GDP

• Nominal GDP

• Total GDP

How do countries use real GDP to calculate growth?

• They calculate the % change in real GDP from one period to the next

• They calculate the difference in GDP from the past two calendar years

• They calculate the sum of GDP from the past two calendar years

• They compare percentages to other countries and calculate the country's ranking

How is nominal GDP calculated?

• Use the current year's prices to calculate the value of the current year's output

• Calculate the % change from one year to another

• Calculate the amount of taxes citizens pay

• Calculate the total amount of goods bought within the year