National product at current prices is higher than national product at constant prices during a period of:
National product at current prices is higher than national product at constant prices during a period of:
(a) Rising prices
(b) Falling prices
(c) Constant prices
(d) Both (a) and (b)
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Ans – (a)
Explanation:-
National product at current prices is measured at the current prevailing prices in the market.
Whereas, national product at constant prices is measured at the base year price.
If, current market price is higher than the base price.
The National product at current prices is higher than the national product at constant prices.
For example,
The Base year is 2015 and the price is ₹ 200
The current year is 2023 and the prevailing price is ₹500
The quantity produced in 2023 is 1200 pieces.
The national product at current prices is
= Quantity × Price
= 1200 × 500 = ₹ 6,00,000
The national product at constant prices is
= 1200 × 200 = ₹ 240000
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