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Economics
Importing and Exporting
Inflation

Which is a better measure of economic well-being real GDP or Nominal GDP?

Answer

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July 10, 2014 9:38PM

Answer

Real GDP takes into account the inflation rate and thus is more accurate at recording the actual increase in production activities. It is not affected by changes in prices, changes in real GDP reflect only changes in the amount being produced, so it is a more accurate measure of economic well being.