If an economy's annual real GDP increases by 10% and prices increase on an annual basis by 30%, then nominal GDP increases by 20% increases approximately by 40% increases approximately by 43% increases approximately by 300%
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Real GDP is the economic output of a country, adjusted for inflation. Nominal GDP is not adjusted for inflation, so it includes all changes in market prices during a year due to inflation or deflation. In this case, the real GDP has increased by 10%, which means Show more…
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