The value of GDP at the current prevailing prices is called _______.

Question

Question

This question was previously asked in

SSC CGL 2022 Tier-I Official Paper (Held On : 02 Dec 2022 Shift 3)

Answer 1

The correct answer is nominal GDP.

Key Points

The gross domestic product (GDP) value at the most recent prices is known as nominal GDP.
It is determined by current market pricing, without taking into account the impact of inflation or deflation.
It shows how much money was spent on the commodities and services a nation generated within a certain fiscal year. In contrast to real GDP, which measures the rate of price rises in an economy, nominal GDP excludes changes in prices brought on by inflation.
Due to the fact that real GDP only takes into account production and is unaffected by changes in prices or exchange rates, it is regarded as a reliable measure of a nation's economic progress.
Growing pricing rather than an increase in the number of goods and services produced may be the cause of nominal GDP growth from year to year.

Important Points

Real gross domestic product (GDP), which refers to the volume level of GDP, is GDP expressed at constant prices.
By quantifying the values of all the goods and services produced in a given year in terms of a base period, one can derive constant price estimates of GDP.
The standard measurement of the value added produced via the production of goods and services in a nation over a specific time period is the gross domestic product (GDP).
Consequently, it also accounts for the revenue generated by that manufacturing, or the total amount spent on finished goods and services (fewer imports).