Which one of the following statements is not correct ?
Real GDP is calculated by valuing outputs of different years at common prices.
Potential GDP is the real GDP that the economy would produce if its resources were fully employed.
Nominal GDP is calculated by valuing outputs of different years at constant prices.
Real GDP per capita is the ratio of real GDP divided by population.
Answer is Right!
Answer is Wrong!
This question was previously asked in
UPSC CDS-1 – 2021
– Nominal GDP uses current prices, which include the effects of both production changes and price changes (inflation/deflation).
– Potential GDP represents the maximum sustainable output an economy can produce.
– Real GDP per capita indicates the average standard of living or economic productivity per person.