💼 Pre-MBA Exam Prep

Real GDP differs from nominal GDP because it:

A Uses current prices
B Adjusts for inflation using base-year prices to reflect actual output changes
C Includes imports
D Excludes government spending

✓ Correct Answer: Option B

Real GDP = Nominal GDP adjusted by GDP deflator. Removes price-level effects to measure actual output growth. Real GDP growth is the true indicator of economic expansion.

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