In which measure is output measured at current year prices?
Answer and explanation
Correct answer: Nominal GDP
Nominal GDP measures the value of final goods and services produced during a particular year using the prices prevailing in that same year. Consequently, it reflects both changes in physical output and changes in prices. Real GDP instead uses base-year or constant prices to isolate output changes, while the GDP deflator is a price index rather than a direct measure of output.
Frequently asked questions
What is the correct answer to this question?
Nominal GDP
Why is this the correct answer?
Nominal GDP measures the value of final goods and services produced during a particular year using the prices prevailing in that same year. Consequently, it reflects both changes in physical output and changes in prices. Real GDP instead uses base-year or constant prices to isolate output changes, while the GDP deflator is a price index rather than a direct measure of output.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Real GDP and Nominal GDP.
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