Economists calculate both nominal GDP and real GDP. Which of the following state

Question

Economists calculate both nominal GDP and real GDP. Which of the following statements best describes the difference between the two? A. Nominal GDP includes both intermediate and final goods and services, while real GDP includes only final goods and services. B. Nominal GDP is measured using current dollars, while real GDP is measured using constant dollars. C. Nominal GDP measures domestic trade, while real GDP measures international trade. D. Nominal GDP includes the value of the budget deficit, while real GDP excludes the budget deficit.

Explanation / Answer

Nominal GDP is nothing but real GDP with current price that means if we adjust price level to some past price level or some benchmark price level that will show the real GDP. So option B is correct.

We have to remeber that both the GDPs have same component but nominal GDP is adjusted real GDP with inflation.

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