Answer to Question #80805 in Macroeconomics for AYANDA

Question

When measuring the GDP, ................ should be considered.

a) Changes in population
b) Changes in unemployment
c) Changes in prices

1) b
2) c
3) a and c
4) b and c
5) All the statements are correct

Answer 1

2) c.
When measuring the GDP, changes in prices should be considered.
Nominal GDP will include all of the changes in market prices that have occurred during the current year due to inflation or deflation. In order to abstract from changes in the overall price level, another measure of GDP called real GDP is often used. Real GDP is GDP evaluated at the market prices of some base year. When we consider changes in prices, measuring the GDP, it helps to understand real changes in quantity of products and services that produce in country.