ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Nominal gross domestic product (GDP) is a measurement of economic output that doesn’t adjust for inflation. GDP measures everything produced by all the people and companies within a country’s borders.

Detailed explanation-2: -Nominal GDP reflects the raw numbers in current dollars unadjusted for inflation. Real GDP adjusts the numbers by fixing the currency value, thus eliminating any distortion caused by inflation or deflation.

Detailed explanation-3: -Since nominal GDP is calculated using current prices, it does not require any adjustments for inflation.

Detailed explanation-4: -As the nominal GDP is calculated at current market prices, the growth in the nominal GDP indicates that there is a price rise instead of an increase in the amount of goods produced. The rise in inflation increases the nominal GDP.