With reference to Nominal Gross Domestic Product (GDP), consider the following statements:
1. It is a poor indicator to measure economic growth in the long term.
2. It is defined as the value of goods and services at current year prices.
3. It is adjusted for inflationary changes in goods & services.

Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c ) 1 and 3 only
(d) 1, 2, and 3

Question

With reference to Nominal Gross Domestic Product (GDP), consider the following statements:
1. It is a poor indicator to measure economic growth in the long term.
2. It is defined as the value of goods and services at current year prices.
3. It is adjusted for inflationary changes in goods & services.

Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c ) 1 and 3 only
(d) 1, 2, and 3

ONLiNE UPSC · Accepted Answer

Statement 1 is correct :Nominal GDP, which measures economic output at current prices, is a poor indicator of economic growth because it can be inflated by price increases (inflation) rather than actual production growth, making real GDP, adjusted for inflation, a better indicator.

Statement 2 is correct : Nominal GDP isdefined as the value of all goods and services produced within a country during a specific period typically a year or a quarter, measured using current market prices, without any adjustments for inflation.

Statement 3 is not correct :Nominal Gross Domestic Product (GDP) does not account for inflation or deflation, meaning it reflects the total value of goods and services at current market prices without any adjustments for price changes.

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M Question 1	⏱ 0
With reference to Nominal Gross Domestic Product (GDP), consider the following statements: 1. It is a poor indicator to measure economic growth in the long term. 2. It is defined as the value of goods and services at current year prices. 3. It is adjusted for inflationary changes in goods & services. Which of the statements given above is/are correct? (a) 1 and 2 only (b) 2 and 3 only (c ) 1 and 3 only (d) 1, 2, and 3

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