Real GDP is preferred over Nominal GDP for welfare comparison because it:

CA Foundation · Business Economics · MTP · May 2026
Real GDP is preferred over Nominal GDP for welfare comparison because it:
(A) A. Includes transfer payments
(B) B. Is measured at current prices
(C) C. Accounts for price level changes
(D) D. Excludes net exports

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. Accounts for price level changes

Topics: Determination of National Income

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