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When Nominal Gross Domestic Product (GDP) is ₹ 850 crores and price index is 170, Real Gross Domestic product (GDP) will be ₹ 500 Crores. Solution:- Real Gross Domestic Product = Nominal Gross Domestic Product/Price index × 100 Real Gross…
Rent + Interest + Profit = Operating Surplus. Explanation:- Operating Surplus is the income that arises from property and entrepreneurship. The income arises from the property are: Rent Interest The income arises from entrepreneurship are: Profit Thus, Operating Surplus =…
Net Domestic Fixed Capital Formation + Change in Stock = Net Domestic Capital Formation. Explanation:- Net domestic capital formation is the sum total of investment in fixed assets and stock during a year after depreciation. Thus Net Domestic capital formation…
Combined factor income, which can’t be separated into various factor income components is known as Mixed Income of the Self Employed. Explanation:- The mixed income of the self-employed can not be separated into various factor income. Thus, the income of…
To compare the GDP figures of different countries, Real (Real GDP/Nominal GDP) gives better results. Explanation:- Real GDP is better than Nominal GDP as it truly reflects the growth of an Economy. Real GDP is calculated at the base price.…
Exports (Exports/Imports) denote aggregate expenditure incurred by rest of the world on final goods and services produced in the domestic territory of the country. Explanation:- Exports are the goods and services produced in the domestic territory of the country. these…
Value added is a Flow (Flow/Stock) variable. Explanation:- Value added is gross domestic product. It is measured over a period of time. for example, the gross domestic product of India is measured for a fiscal year that is 12 months.…
Higher production of Consumption (Capital/Consumption) goods promote welfare of people in the economy. Explanation:- As per economics, Higher is the consumption more is the welfare
Real GDP is better than Nominal GDP as it truly reflects the growth of an Economy. Explanation:- Real GDP is calculated at the base price. It changes when the quantity produced changes. If the Quantity produced is less, it decreases…
When GDP of a given year is estimated on the basis of price of the same year, it is called Nominal GDP or GDP at Current Price.