What type of GDP is obtained by measuring GDP at current prices?
Answer and explanation
Correct answer: Nominal GDP
GDP measured using the prices prevailing in the current year is called nominal GDP, also known as GDP at current prices. It reflects changes in both the quantity of goods and services produced and their prices. Therefore, nominal GDP may rise because output increases, prices increase, or both. Real GDP is different because it uses constant or base-year prices to measure changes in actual production.
Frequently asked questions
What is the correct answer to this question?
Nominal GDP
Why is this the correct answer?
GDP measured using the prices prevailing in the current year is called nominal GDP, also known as GDP at current prices. It reflects changes in both the quantity of goods and services produced and their prices. Therefore, nominal GDP may rise because output increases, prices increase, or both. Real GDP is different because it uses constant or base-year prices to measure changes in actual production.
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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