ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Actual output refers to the current rather than potential level of production (real GDP) in an economy. When actual output is rising, the output gap is often declining and an economy is moving closer to their production possibility frontier by increasing the level of capacity utilisation.

Detailed explanation-2: -What is output? Output is a quantity of goods or services produced in a specific time period (for instance, a year). For a business producing one good, output could simply be the number of units of that good produced in each time period, such as a month or a year.

Detailed explanation-3: -Economic output is sometimes referred to as gross output or simply output. As stated before, economic output is different from GDP. Gross domestic product is a measure of “value added” at the national level.

Detailed explanation-4: -Real value is obtained by removing the effect of price level changes from the nominal value of a good, service, or time-series data, so as to obtain a truer picture of economic trends. The nominal value of time-series data, such as GDP and incomes, is adjusted by a deflator to derive real values.