The nominal gross domestic product (GDP) is calculated at the _____.
Show answer & explanation
Correct answer: B
Explanation
Correct Answer:
Option 2: current prevailing prices
Explanation:
Nominal Gross Domestic Product (Nominal GDP) is calculated at current prices. It aggregates the market value of all goods and services produced in a given year, valued at the prices prevailing in that same year. It does not account for inflation; therefore, if prices rise, Nominal GDP may appear to have increased even if actual production has not. Conversely, Real GDP measures actual production by removing the impact of price changes.
Additional Facts:
Option 1: Real GDP is calculated at constant prices.
Option 3: The RBI does not determine prices.
Option 4: The World Bank does not determine prices.
Potential Questions for Upcoming Exams:
Question: What is Real GDP based on?
Answer: Constant Prices
Question: What is the full form of GDP?
Answer: Gross Domestic Product
Question: What is inflation?
Answer: An increase in prices
Question: Who estimates GDP in India?
Answer: NSO (National Statistical Office)