ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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GDP is calculated using current prices.
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GDP is calculated only with goods and services costing less than $10.
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GDP is calculated taking inflation into account.
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GDP is calculated without government spending.
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Detailed explanation-1: -Nominal gross domestic product (GDP) is the value of all the final goods and services at current market prices. In other words, it is the GDP calculated at the current market prices. It takes into account factors such as inflation, price changes, changing interest rates, and money supply at the time of determining GDP.
Detailed explanation-2: -Nominal GDP measures aggregate output (meaning the value of all of the final goods and services produced) using current prices.
Detailed explanation-3: -In short, nominal GDP measures the economic production at current market prices, whereas real GDP measures the economic production factoring in any prices changes in the market (deflation or inflation).
Detailed explanation-4: -Nominal GDP is a macroeconomic assessment of the value of goods and services using current prices in its measure; it’s also referred to as the current dollar GDP.
Detailed explanation-5: -Nominal GDP is derived by multiplying the current year quantity output by the current market price. In the example above, the nominal GDP in Year 1 is $1000 (100 x $10), and the nominal GDP in Year 5 is $2250 (150 x $15).