Which explanation is defensible for an investigation of why real gdp growth differs from nominal gdp growth?
Note
It adjusts for changes in prices is the correct choice. Inflation-adjusted real GDP isolates changes in production better than nominal GDP.
The Bureau of Economic Analysis measures state GDP as economic production, not household income or tax revenue. Nominal dollars and inflation-adjusted output answer different questions. Always check the measurement, reference year, and geographic boundary before comparing figures.