Explain why measuring gdp in real terms is important

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Now suppose that nominal GDP in 2003 totals $8546 billion and rises to $13.1 trillion ten years later for the United States. The GDP deflator for 2003 is 1.85 and for 2013 is 2.75, in what year is real GDP greater? By how much? How did you arrive at this conclusion? Show all work and fully explain your reasoning. Explain why measuring GDP in real terms is important.

Reference no: EM13985825

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