macroeconomics

should we care more about nominal GDP or real GDP??

Thank you for using the Jiskha Homework Help Forum. Here is a link that discusses that very question:

http://economics.about.com/cs/macrohelp/a/nominal_vs_real.htm

A GDP based on the prices that prevailed when the output was produced is called unadjusted GDP, or nominal GDP.
A GDP that has been deflated or inflated to reflect changes in the price level is called adjusted GDP, or real GDP.

http://en.wikipedia.org/wiki/Real_vs._nominal_in_economics

I suppose the answer to your question depends on the particular issue being addressed. However, if I had to pick one over the other, I personally would want real GDP rather than nominal GDP.

  1. 👍
  2. 👎
  3. 👁
  1. How do you find output and input?

    1. 👍
    2. 👎

Respond to this Question

First Name

Your Response

Similar Questions

  1. economics

    Question 1. An accurate statement about the Great Depression would be that? A. it was a recession that became a depression because of World War II. B. it was set off because of a sharp and unexpected rise in interest rates. C. it

  2. Economics

    What components of GDP (if any) would each of the following transactions affect? Explain. (b) Aunt Jane buys a new house. (c) Ford sells a Mustang from its inventory. (g) Honda expands its factory in Marysville, Ohio. My Answers:

  3. Economics Macro

    Suppose that real GDP per capita in the United States is $49,000. If the long-term growth rate of real GDP per capita is 1.6% per year, how many years will it take for real GDP per capita to reach $98,000?

  4. Macroeconomics* Please check my answers*

    If real GDP per capita grows at a rate of 5% per year consistently over time, how many years would it take for it to double in size? 5 10 My answer 14 70 The purpose of indexing Social Security payments to the CPI is to ______.

  1. Economics

    Concern about international crisis has caused consumers to save their money and postpone big purchases. What is the effect on aggregate demand and aggregate supply? A. No change B. Aggregate supply will decrease, raising the price

  2. ECONOMICS

    this is a table with some questions and i don't know how to solve it -------------table-------------------- (1)real domestic output (GDP=DI) in billions $200 $250 $300 $350 $400 $450 $500 $550 (2)aggregate expenditures private

  3. Macro Help

    Calculating Marginal Propensity to Save and Marginal Propensity to Consume Consider the following table. For this hypothetical economy, the marginal propensity to save is constant at all levels of real GDP, and investment spending

  4. Macroeconomics

    The money supply in Freedonia is $200 billion. Nominal GDP is $800 billion and real GDP is $400 billion. Assuming that velocity is stable, if real GDP grows by 10 percent this year, and if the money supply does not change this

  1. Economics

    1. What effect would a decrease in consumer savings have on the aggregate demand curve? The curve would level off. The curve would shift to the right. The curve would shift to the left. The curve would not change 2. If there is an

  2. macroeconomics

    27. The following data show nominal GDP and the appropriate price index for several years. Compute real GDP for each year and indicate whether you have “inflated” or “deflated” nominal GDP in finding real GDP. All GDP are

  3. Economics

    3. Starting from short-run equilibrium, the following occurs: Labor productivity rises, and individuals expect higher (future) incomes. What will be the effects on the price level, Real GDP, and the unemployment rate in the short

  4. Econ

    When considering economic growth, many policy makers focus on real GDP per capita since it takes into account the potentially distorting effects of ______________ and ________________. Any large, sustainable increase in real GDP

You can view more similar questions or ask a new question.