Q13. Consider the following statements:
1. Base Year prices are used to calculate the real GDP
2. Base Year prices are used to calculate the nominal GDP
Select the correct answer using the code given below.
Q13. Consider the following statements:
1. Base Year prices are used to calculate the real GDP
2. Base Year prices are used to calculate the nominal GDP
Select the correct answer using the code given below.
The correct option is A a) 1 only
Base-year analysis is the analysis of economic trends in relation to a specific base year. Base-year analysis expresses economic measures in base-year prices to eliminate the effects of inflation. Base-year analysis is often used when expressing gross domestic product and is known as real GDP when referred to in this way. By eliminating inflation, the trend of economic growth is more accurate, as price level changes are accounted for. The Central Statistics Office, under the ministry, had last updated base year for GDP calculation to 2011- 12 from January 2015, replacing the old series base year of 2004-05.GDP based on old series does not reflect current economic situation correctly.
a) 1 only
Base-year analysis is the analysis of economic trends in relation to a specific base year. Base-year analysis expresses economic measures in base-year prices to eliminate the effects of inflation. Base-year analysis is often used when expressing gross domestic product and is known as real GDP when referred to in this way. By eliminating inflation, the trend of economic growth is more accurate, as price level changes are accounted for. The Central Statistics Office, under the ministry, had last updated base year for GDP calculation to 2011- 12 from January 2015, replacing the old series base year of 2004-05.GDP based on old series does not reflect current economic situation correctly.
