Why is it important to use real rather than nominal GDP figures when making comparisons of output across time periods? (1) The real figures will reflect changes in the quantity of output and not changes in the general level of prices. (2) The real GDP figures are a better measure of changes in the general level of prices. (3) The real figures will reflect changes in the general level of prices as well as changes in (4) The real GDP figures adjust for changes in the level of employment.

Using real GDP figures is crucial because they adjust for inflation, allowing economists to see the true growth or contraction of an economy over time. This provides a clearer picture of economic performance by isolating changes in output rather than changes in price levels, which can be significantly affected by inflation or deflation. Moreover, nominal GDP can be misleading when comparing data from different time periods or countries. For instance, if the nominal GDP increases due to rising prices rather than an actual increase in goods and services produced, it may lead to false conclusions about economic health or growth. Real GDP ensures that you're truly measuring an economy's output and not just its monetary value.