contestada

Nominal GDP in the United States was $5,803 billion in 1994 and $11,734 billion in 2008, so we can conclude that aggregate output roughly doubled over the 14-year period in the United States. True False

Respuesta :

It would be inappropriate to conculde that aggregate output roughly doubled over 14- year period in the United States.

Explanation:

Nominal GDP refers to the GDP valuation evaluated at the current prices. It does not factor in the effect of inflation/deflation existing in the economy at the time of GDP calculation.

GDP during the US in 1994 was 5,803$ and during 2008, the nominal GDP of the US was $11,734 billion. Nominal GDP calculated during 2008 includes inflationary effect too. Hence it can't be safely assumed to be double of 1994's GDP. Hence for the real picture of the GDP increase/decrease factor Real GDP must be used for comparison purpose.

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