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Why is that Real GDP is higer than Nominal GDP before the base year but Real GDP becomes less than Nominal GDP after the base year.

2007-09-19 04:54:46 · 1 answers · asked by cavin_mild16 3 in Social Science Economics

1 answers

Because real GDP is stated in base-year dollars. Since inflation is generally positive, a dollar was generally worth more before before the base year and less after the base year.

2007-09-19 05:07:58 · answer #1 · answered by NC 7 · 2 0

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