Question

12 multiple choice 2 points
absolute real economic growth is an increase in ___________ from one period to the next.
real gdp
gdp
per-capita gdp
per-capita real gdp

Explanation:

Define absolute real economic growth

Absolute real economic growth measures the overall expansion of an economy's total output adjusted for inflation, without adjusting for population changes.

Identify the corresponding macroeconomic metric

The metric that represents total output adjusted for price changes (inflation) is Real Gross Domestic Product (Real GDP).

Evaluate the given options

• Real GDP: Correct, as it represents inflation-adjusted total output.
• GDP: Incorrect, as nominal GDP does not adjust for inflation.
• per-capita GDP: Incorrect, as it is a per-person nominal measure.
• per-capita Real GDP: Incorrect, as this measures per-capita real growth rather than absolute real growth.

Answer:

• Real GDP (Correct answer)
• GDP
• per-capita GDP
• per-capita Real GDP