Question

which of the following statement regarding economic growth is correct
(1) if nominal GDP in Swaziland increase by 5% between 2015 and 2016, it can be said that the country has undoubtedly experienced economic growth during this period
(2) real GDP is obtained by adjusting GDP at current prices for inflation
(3) GDP per capita is calculated by multiplying nominal GDP by the population size
(4) GDP is an accurate indicator of economic welfare

Answer 1

(2) real GDP is obtained by adjusting GDP at current prices for inflation

 Real GDP refers to a measure of economic growth which is adjusted for inflation reflecting valued of goods and services which are produced by an economy at a particular given year, expressed in the based year prices. It accounts for the changes in price levels as well as providing more accurate figure of the growth in the economy.