ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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unemployment
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store inventory
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interest rates
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inflation
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Detailed explanation-1: -Nominal GDP reflects the raw numbers in current dollars unadjusted for inflation.
Detailed explanation-2: -The correct answer is (i). Nominal GDP is the aggregate value of all final goods and services at current prices, whereas real GDP is the aggregate value of all final goods and services at constant prices.
Detailed explanation-3: -Nominal Gross Domestic Product (GDP) vs. Real Gross Domestic Product (GDP) A nation’s nominal GDP growth might overstate its growth if inflation is present when we compare GDP growth between two periods using the GDP price deflator. For example, if prices rose by 1% since the base year, the GDP deflator would be 1.01.
Detailed explanation-4: -Expansion is the phase of the business cycle where real gross domestic product (GDP) grows for two or more consecutive quarters, moving from a trough to a peak. Expansion is typically accompanied by a rise in employment, consumer confidence, and equity markets and is also referred to as an economic recovery.