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Updated on
29 Jun 2017

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I think GDP is a good measure of economic activity. GDP can measure the total spending on goods or services excluding the price changes with the two kinds of GDP, real and nominal GDP. Even when the price of the goods or services was changed from the previous year, the total spending on goods or services can be measured by GDP. However, we have to understand that if the base year we use was changed, the value of real GDP is also changed. Real GDP shows the value of total spending on goods or services only when we use the specific base year. We need to be careful not to be confused when we use the value based another years. The values are two entirely different things. Does this sound natural?

This is my homework. If there's something strange, please correct!
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