When deciding how much of your income to save for retirement, should you consider the real or the nominal interest rate that your savings will earn? Explain, applying what you know about the difference between real and nominal from our application of GDP.
When deciding how much of your income to save for retirement, should you consider the real or the nominal interest rate that your savings will earn? Explain, applying what you know about the difference between real and nominal from our application of
Nominal gross domestic product refers to the current value of all final goods and services produced in a year in a territory of a country.
Real GDP refers to the final value of all goods and services produced in a year in a country on fixed price base year.In other words adjusted for inflation.
The main difference between nominal GDP and real GDP is that real GDP is adjusted for inflation while nominal GDP not.
As for example nominal gdp may rise due to prices due to inflation but real gdp gives actual picture of rise in production of goods and services in economy.Because real GDP takes inflation into account.
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