Answer: Real GDP is not influenced by price changes, but nominal GDP is
Explanation:
Gross Domestic Product is the amount of final goods and services that a country produces domestically within a certain period which is usually a year.
There is Real GDP and Nominal GDP.
Real GDP is Nominal GDP adjusted for inflation while Nominal GDP is GDP for the year with current prices.
When Inflation occurs, it can have the effect of overstating the growth of an economy because it values the final goods higher than the previous period even if the economy may not have grown.
Real GDP is better therefore because it removes this inflationary effect (price change) thereby allowing us to see if indeed the Economy has grown and is producing more by standadizing the prices across the periods being compared.
