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Nominal GNP is same as
- a)Real GNP
- b)GNP less Net factor income from abroad
- c)GNP at constant prices
- d)GNP at current prices
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Nominal GNP is same asa)Real GNPb)GNP less Net factor income from abro...
The answer is a.
GNP Deflator: It is clear that nominal GNP usually exceeds real GNP because of inflation. Greater the difference between nominal and real GNP, greater is the inflation. It may happen that GNP data at constant prices may not be available in the economy.
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Nominal GNP is same asa)Real GNPb)GNP less Net factor income from abro...
Nominal GNP refers to the Gross National Product measured at current prices. It is an economic indicator that measures the total value of all final goods and services produced by the residents of a country in a given period, usually a year. Here is a detailed explanation of why the correct answer is option 'D' - GNP at current prices.
Explanation:
Nominal GNP:
- Nominal GNP, also known as current GNP, is calculated by valuing the output of goods and services at current market prices.
- It reflects the actual prices prevailing in the economy during the period being measured.
- Nominal GNP includes the effects of both changes in physical output and changes in prices.
Differences between Nominal GNP and Real GNP:
- Real GNP, on the other hand, is an economic measure that takes into account changes in prices over time.
- Real GNP is calculated by adjusting the nominal GNP for changes in the general price level, allowing for a more accurate comparison of economic performance over time.
- Real GNP is measured at constant prices, which means that the effects of inflation or deflation are eliminated.
- By contrast, nominal GNP is measured at current prices, which means that it includes the effects of changes in prices.
Importance of Nominal GNP:
- Nominal GNP provides a snapshot of the current economic performance of a country.
- It is useful for comparing the economic output of different countries or regions.
- Nominal GNP is often used as a basis for calculating other economic indicators, such as per capita GNP or GNP growth rates.
- It is also used in the calculation of various economic ratios and indicators, such as the GNP deflator, which measures the average change in prices of all goods and services produced in an economy.
Conclusion:
In conclusion, the correct answer is option 'D' - GNP at current prices. Nominal GNP is a measure of the total value of goods and services produced by a country's residents at current market prices. It includes the effects of changes in both physical output and prices. By contrast, real GNP is measured at constant prices, adjusting for changes in the general price level. Nominal GNP is an important economic indicator that provides insight into the current economic performance of a country and is used for various economic calculations and comparisons.
Explanation:
Nominal GNP:
- Nominal GNP, also known as current GNP, is calculated by valuing the output of goods and services at current market prices.
- It reflects the actual prices prevailing in the economy during the period being measured.
- Nominal GNP includes the effects of both changes in physical output and changes in prices.
Differences between Nominal GNP and Real GNP:
- Real GNP, on the other hand, is an economic measure that takes into account changes in prices over time.
- Real GNP is calculated by adjusting the nominal GNP for changes in the general price level, allowing for a more accurate comparison of economic performance over time.
- Real GNP is measured at constant prices, which means that the effects of inflation or deflation are eliminated.
- By contrast, nominal GNP is measured at current prices, which means that it includes the effects of changes in prices.
Importance of Nominal GNP:
- Nominal GNP provides a snapshot of the current economic performance of a country.
- It is useful for comparing the economic output of different countries or regions.
- Nominal GNP is often used as a basis for calculating other economic indicators, such as per capita GNP or GNP growth rates.
- It is also used in the calculation of various economic ratios and indicators, such as the GNP deflator, which measures the average change in prices of all goods and services produced in an economy.
Conclusion:
In conclusion, the correct answer is option 'D' - GNP at current prices. Nominal GNP is a measure of the total value of goods and services produced by a country's residents at current market prices. It includes the effects of changes in both physical output and prices. By contrast, real GNP is measured at constant prices, adjusting for changes in the general price level. Nominal GNP is an important economic indicator that provides insight into the current economic performance of a country and is used for various economic calculations and comparisons.
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Nominal GNP is same asa)Real GNPb)GNP less Net factor income from abroadc)GNP at constant pricesd)GNP at current pricesCorrect answer is option 'D'. Can you explain this answer?
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