ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Real
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Current
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Nominal
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None of the above
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Detailed explanation-1: -In Real GDP, Nominal GDP is taken into account and is adjusted for inflation or deflation to base year’s prices. As a result of this adjustment, the real GDP is a more accurate representation of a nation’s economic health. The GDP deflator is a measurement of inflation since a base year.
Detailed explanation-2: -Nominal Gross Domestic Product (GDP) and Real GDP both quantify the total value of all goods produced in a country in a year. However, real GDP is adjusted for inflation, while nominal GDP isn’t.
Detailed explanation-3: -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-4: -Nominal GDP is an assessment of economic production in an economy that includes current prices in its calculation. In other words, it doesn’t strip out inflation or the pace of rising prices, which can inflate the growth figure.