In the current year, 200 units are produced. The current price is ₹15 and the base-year price is ₹12. What will be real GDP?
Answer and explanation
Correct answer: ₹2,400
Real GDP values current-year output at base-year prices. Thus, the current quantity of 200 units must be multiplied by the base-year price of ₹12: 200 × ₹12 = ₹2,400. Option B is correct. The amount ₹3,000 is nominal GDP because it uses the current price of ₹15. This distinction prevents price changes from being mistaken for changes in actual production.
Frequently asked questions
What is the correct answer to this question?
₹2,400
Why is this the correct answer?
Real GDP values current-year output at base-year prices. Thus, the current quantity of 200 units must be multiplied by the base-year price of ₹12: 200 × ₹12 = ₹2,400. Option B is correct. The amount ₹3,000 is nominal GDP because it uses the current price of ₹15. This distinction prevents price changes from being mistaken for changes in actual production.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
