Real GDP is calculated in a way such that goods and services are evaluated at some constant set of prices. Since these prices remain fixed, if the Real GDP changes, we can be sure that it is the volume of production which is undergoing changes. Nominal GDP, on the other hand, is simply the value of GDP at the current prevailing prices.
When the value of final goods and services are estimated at current price, it is?
Nominal G.D.P.
The correct answer is **Nominal G.D.P.**.
- **Nominal GDP** is the **value of goods and services measured at current market prices**.
- **Real GDP**, on the other hand, is calculated using constant prices to adjust for inflation.
- **(a) Real GDP** → Incorrect, as it measures production at constant prices.
- **(c) GDP at constant prices** → Incorrect, as it is another term for Real GDP.
- **(d) Consumer Price Index** → Incorrect, as CPI measures inflation, not GDP.
Important Questions from National Income and Related Aggregates
In the calculation of GDP by Expenditure method, what should be added from the following:
(A) Private Final Consumption expenditure
(B) Investment Expenditure
(C) Net imports
(D) Net exports
(E) Government Final Consumption Expenditure
Choose the correct answer from the options given below:
Fill in the blanks:
In a modern economy, money comprises of _______ and _______.
Which of the following makes the workers highly vulnerable?
If Marginal Propensity to Consume (MPC) is 4 times the value of the Marginal Propensity to Save (MPS), determine the value of MPC:
Match List-I with List-II:
List-I List-II (A) Ex-ante saving (I) Actual Saving (B) Ex-post consumption (II) Planned Saving (C) Ex-ante consumption (III) Planned Consumption (D) Ex-post saving (IV) Actual Consumption
