ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A statistical tool called the price deflator is used to adjust GDP from nominal to constant prices. GDP is important because it gives information about the size of the economy and how an economy is performing. The growth rate of real GDP is often used as an indicator of the general health of the economy.

Detailed explanation-2: -GDP is measured by taking the quantities of all goods and services produced, multiplying them by their prices, and summing the total. GDP can be measured either by the sum of what is purchased in the economy or by what is produced. Demand can be divided into consumption, investment, government, exports, and imports.

Detailed explanation-3: -Factors such as gross domestic product (GDP), interest rates, total employment, and consumer spending can help to determine the current stage of the economic cycle.

Detailed explanation-4: -It represents the value of all goods and services produced over a specific time period within a country’s borders. Economists can use GDP to determine whether an economy is growing or experiencing a recession. Investors can use GDP to make investment decisions-a bad economy often means lower earnings and stock prices.

Detailed explanation-5: -The business cycle is a series of expansions and contractions in real GDP. The cycle begins at a peak and continues through a recession, a trough, and an expansion.