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Economists measure growth by the percentage change in which measure?
AAverage retail price level
BReal gross domestic product
CTotal company profits made
DThe number of new firms
Answer & Solution
Correct answer: B. Real gross domestic product
1. Growth must be measured after stripping out price changes.
2. GDP is the value of all final goods and services produced in a year.
3. Economists measure growth by the percentage change in real gross domestic product.
4. Real means inflation-adjusted.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 5 'The Macroeconomic Perspective'_
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