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a. Is real GDP a better measure of well being than nominal GDP? Please explain b. Suppose the rate of inflation is calculated as the
a. Is real GDP a better measure of well being than nominal GDP? Please explain
b. Suppose the rate of inflation is calculated as the percentage increase in the cost of buying the basket of goods purchased by consumers last year. If real GDP growth is calculate by subtracting this inflation rate from nominal GDP growth, give two reasons why the real growth rate of the economy might be underestimated.
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