Which of the following is correct regarding National Income Accounting ?

1. In order to compare the GDP figures of the same countries at different points of time, nominal GDP is used.
2. In order to compare the GDP figures of different countries, real GDP is used.
3. Flows are defined at a particular point of time.
4. Stocks are defined over a period of time.

Option 1 -> Incorrect. Real GDP (not nominal) is used to compare GDP of the same country at different times because it adjusts for inflation.

Option 2 -> Correct. Real GDP eliminates price level differences and allows meaningful comparison of actual output across countries.

Option 3 -> Incorrect. Flows are measured over a period of time (e.g., income per year), not at a point in time.

Option 4 -> Incorrect. Stocks are measured at a particular point in time (e.g., wealth on a specific date), not over a period.

Hence, Option 2: In order to compare the GDP figures of different countries, real GDP is used -> Real GDP adjusts for price level differences and inflation, making it the appropriate measure for cross-country comparisons. It reflects actual production/output levels rather than just monetary values affected by varying price levels. For temporal comparisons within the same country, real GDP is also used (not nominal). Flows like GDP, income, and expenditure are measured over a period, while stocks like wealth and capital are measured at a specific point in time -> correct