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Commerce Exam  >  Commerce Questions  >  Real GNP is same asa)Nominal GNPb)GNP at curr... Start Learning for Free
Real GNP is same as
  • a)
    Nominal GNP
  • b)
    GNP at current prices
  • c)
    GNP at constant prices
  • d)
    GNP less Net factor income from abroad
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
Real GNP is same asa)Nominal GNPb)GNP at current pricesc)GNP at consta...
Explanation:

  • GNP stands for Gross National Product which is the total value of goods and services produced by a country in a given period of time.

  • Real GNP refers to the GNP that has been adjusted for inflation, and it is measured in constant prices.

  • Nominal GNP refers to the GNP that has not been adjusted for inflation, and it is measured in current prices.

  • Net factor income from abroad refers to the income received by a country from abroad minus the income paid by the country to foreign entities.

  • Therefore, Real GNP is the GNP that has been adjusted for inflation and is measured in constant prices.

  • Real GNP is a more accurate measure of a country's economic performance than Nominal GNP because it takes into account the effects of inflation.

  • Real GNP can be calculated by using a price index such as the Consumer Price Index (CPI) or the Gross Domestic Product (GDP) deflator to adjust Nominal GNP for inflation.

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Real GNP is same asa)Nominal GNPb)GNP at current pricesc)GNP at consta...
GNP calculated at constant prices is called real GNP whereas calculated at current prices, it is called nominal GNP
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Read the following passage and answer the questions that follows:In economics, rationing is an artificial restriction of demand and is done to keep price below the equilibrium (market-clearing) price determined by the process of supply and demand in an unfettered market. Thus, rationing can be complementary to price controls which can be explained through indifference curve approach.There are two kinds of rationing done by the government to reduce consumption—price rationing and non-price rationing. By rationing, we mean exercise tax and by non-price rationing, we mean all types of control on the quantity consumed. Non-price rationing could be done by giving away coupons that would enable low income families to obtain some goods at affordable prices, which could not be possible if the prices were to increase alone. With coupon schemes, it would develop a black market for coupons, which would paradoxically increase the utility for those who are in need of that commodity by collection of more of these coupons from those who are not in need. This ensures greater marginal utility for those people who are in need of the commodity and will provide exchange of money to those who sell these coupons. For this, it is necessary for the government to encourage trading of the coupons.The major importance of introducing rationing is to keep the price of important commodities under control, as for a necessary commodity, there will be an excessive demand in the market which will drive their price up in the market and high prices leads to reduction of consumption and utility for those who could not afford it. This ensures that the resources are planned in favour of the poor people of the country and restricts the rich people to ensure excessive purchase of limited resources of the country. This ensures development and equality of welfare and utilitybetween the rich and the poor people. Rationing of the good is done by the government and not the private sector. There is the same limit put on every person on the budget spending to which people could buy the commodities and within the limit, one could buy any amount of the commodity.Q. Rationing of goods by the government ......................

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Read the following passage and answer the questions that follows:In economics, rationing is an artificial restriction of demand and is done to keep price below the equilibrium (market-clearing) price determined by the process of supply and demand in an unfettered market. Thus, rationing can be complementary to price controls which can be explained through indifference curve approach.There are two kinds of rationing done by the government to reduce consumption—price rationing and non-price rationing. By rationing, we mean exercise tax and by non-price rationing, we mean all types of control on the quantity consumed. Non-price rationing could be done by giving away coupons that would enable low income families to obtain some goods at affordable prices, which could not be possible if the prices were to increase alone. With coupon schemes, it would develop a black market for coupons, which would paradoxically increase the utility for those who are in need of that commodity by collection of more of these coupons from those who are not in need. This ensures greater marginal utility for those people who are in need of the commodity and will provide exchange of money to those who sell these coupons. For this, it is necessary for the government to encourage trading of the coupons.The major importance of introducing rationing is to keep the price of important commodities under control, as for a necessary commodity, there will be an excessive demand in the market which will drive their price up in the market and high prices leads to reduction of consumption and utility for those who could not afford it. This ensures that the resources are planned in favour of the poor people of the country and restricts the rich people to ensure excessive purchase of limited resources of the country. This ensures development and equality of welfare and utilitybetween the rich and the poor people. Rationing of the good is done by the government and not the private sector. There is the same limit put on every person on the budget spending to which people could buy the commodities and within the limit, one could buy any amount of the commodity.Q. ______ means the utility derived from the total number of products consumed (choose the correct alternativ e).

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Real GNP is same asa)Nominal GNPb)GNP at current pricesc)GNP at constant pricesd)GNP less Net factor income from abroadCorrect answer is option 'C'. Can you explain this answer?
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