Question

Which statement is correct for nominal GDP?

i.Nominal GDP is calculated based on current prices.

ii.Nominal GDP is calculated based on the base prices.

iii.Data on Nominal GDP shows an accurate picture of the economy as compared to real GDP.

• A. Only ii, iii
• B. Only ii
• C. Only i
• D. Only iii

Answer 1

Answer:

C. Only i

Nominal GDP is calculated on the basis of current prices. While real GDP is calculated on the base year prices and its data are more reliable or accurate as compared to Nominal GDP.