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Question

State true or false with reasons--

1. Nominal GDP can never be less than real GDP.

2. Gross domestic capital formation is always greater than gross fixed capital formation.

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Solution

1. False. ​Nominal GDP can be less than real GDP if the prices in current year is less than the prices in the base year.
2. False. Gross domestic capital formation can be less than gross fixed capital formation if change in stock is negative.

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