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Which one of the following statements is FALSE? Question 4 options: As long as prices are increasing, real G?

  • Which one of the following statements is FALSE? As long as prices are increasing, real GDP will grow less rapidly than nominal GDP. Using the constant dollar approach, the GDP growth rate may vary depending upon the base year chosen. Nominal GDP is expressed in terms of current prices. Using the chained dollar approach, the GDP growth rate is not dependent upon the base year chosen to calculate real GDP. A constant dollar approach to calculating real GDP yields a unique estimate of the growth rate. I am going through my economics study guide. Please help if you can guide me through this question.

  • Answer:

    Using the chained dollar approach, the GDP growth rate is not dependent upon the base year chosen to calculate real GDP.

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Using the chained dollar approach, the GDP growth rate is not dependent upon the base year chosen to calculate real GDP.

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