When goods and services are evaluated at some constant set of prices, it can also be defined as.

Option 1 -> When goods and services are evaluated at constant prices from a base year, eliminating inflation effects.

Option 2 -> A price index measuring the ratio of nominal GDP to real GDP, not a valuation at constant prices.

Option 3 -> Describes the pricing method itself, not the economic measure that results from it.

Option 4 -> Calculated using current market prices, not constant prices, and includes inflation effects.

Hence, Real GDP -> Real GDP is specifically defined as the value of goods and services evaluated at constant prices from a base year. This method removes the impact of price changes (inflation or deflation) and allows for meaningful comparisons of economic output across different time periods. By holding prices constant, Real GDP measures the actual change in the volume of production rather than changes due to price fluctuations. For example, if Real GDP increases by 3%, it means the economy actually produced 3% more goods and services, not that prices simply went up -> correct