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Why does real GDP equal nominal GDP divided by CPI for the given year?

A

Because the actual production is equal to the aggregate demand.

B

Because one must factor out any price changes in the value of the economy to enable true (or real) GDP comparisons.

C

Because nominal GDP does not include inflation it must factored in to calculate real GDP.

D

Because aggregate supply is the same as CPI. Therefore, if one divides nominal GDP by aggregate supply one will know the real GDP.

E

Because nominal GDP is the same as the level of consumption. So when one factors price changes out of the consumption level then real gross domestic production becomes obvious.

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