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The word real in real GDP signals that the figure has been adjusted for:
AInflation
BPopulation
CTrade flows
DTax rates
Answer & Solution
Correct answer: A. Inflation
1. Prices rise over time, which can inflate a raw output figure.
2. Growth is the percentage change in real gross domestic product.
3. Real is defined directly as inflation-adjusted.
4. Nominal GDP has not been adjusted in that way.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 5 'The Macroeconomic Perspective'_
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