Macro

National Income

Easy

Comprehension:

GDP figures and other macroeconomic variables

Suppose a country only produces rice. In the year 2020, it produced 100 Kg of rice. The price was Rs 10 per kg of rice and the GDP at the current price was Rs 1,000. In 2021, the same country will produce 110 Kg of rice at a price of Rs 15 per kg.

What is real GDP in 2021?

Rs 1,100.

Rs 1,000.

Rs 1,200.

Rs 1,300.

✅ Correct Option: 1

In 2021, output = 110 kg

To compare GDP properly, base year price (2020 price) is used.

Base year price = Rs 10 per kg

Real GDP in 2021:

$= 10 \times 110$

$= 1100$

Thus, GDP (at constant price) in 2021 is:

Rs 1100

Question 41

What is GDP deflator?

Question 42

What is the base year?

Question 44

What is change in price?

Question 45

What is the nominal GDP in 2021?

What is real GDP in 2021?

Solution

More from this set:

Keyboard Shortcuts

CUET Economics Past Year Questions (Topic-Wise)