Which of the following statements about GDP is correct? A. Nominal GDP values pr

Question

Which of the following statements about GDP is correct?

A. Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
B. Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C. Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D. Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.

Explanation / Answer

B. Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.

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