ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Output has increased by 4 percent
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Output has declined by 4 percent
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Output change is uncertain
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The economy is experiencing 4 percent inflation
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The economy is experiencing a recession
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Detailed explanation-1: -Which of the following is true if real GDP in year 1 is $5, 000 and in year 2 is $5, 200? Output has increased by 4 percent. When the actual inflation rate is greater than the anticipated inflation rate, which of the following is most likely to suffer? Those who lend at a fixed interest rate.
Detailed explanation-2: -Q. Which of the following are correct for Real GDP? Notes: Real GDP refers to current year production of goods and services valued at base year prices. Real GDP is corrected for inflation.
Detailed explanation-3: -percentage change chain-weighted real GDP from year 1 to year 2 is therefore 100.8%.
Detailed explanation-4: -In general, calculating real GDP is done by dividing nominal GDP by the GDP deflator (R). For example, if an economy’s prices have increased by 1% since the base year, the deflating number is 1.01. If nominal GDP was $1 million, then real GDP is calculated as $1, 000, 000 / 1.01, or $990, 099.
Detailed explanation-5: -Nominal GDP is a macroeconomic estimate of the value of goods and services using current prices to their extent. Nominal GDP is also called current GDP in dollars. Real GDP takes into account adjustments for changes in inflation. Hence, the correct answer is the option d) I and II