What is the difference between Real GDP and Nominal GDP

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Reference no: EM131095607

GDP is the major economic variable used to measure the health of the economy; indeed, as we learn, recessions are defined based on the direction of change in GDP. GDP is a difficult measure to construct, as certain transactions and expenditures are not included. Here are some questions that may help us better understand what GDP is and how it is constructed:

- What is the difference between Real GDP and Nominal GDP?

- Why do we avoid multiple counting or double counting when measuring GDP?

- Are the sales of used goods included in the current year's GDP? Why or why not?

Reference no: EM131095607

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