If the nominal GDP of the current year is double the nominal GDP of the base year, the volume of production of the country must have doubled. TRUE/FALSE
Answers
Answer:
false
Explanation:
the nominal GDP of the current year is double the nominal GDP of the base year, the volume of production of the co
untry must have doubled.
the nominal GDP of country and country will not double
The given statement in the question is False.
Explanation:
Nominal GDP essentially measures the nominal or only numerical/mathematical market value of all the goods and services produced in the economy at present time.It is not adjusted for the inflationary or deflationary impacts on the market value of prices of goods and services.Hence,it does not reflect the inflation adjusted market value of products and services,as opposed to real GDP.Now,base year usually refers to any previous year and the nominal GDP of that particular year is compared with the nominal GDP of the current year.It is reasonable to assume that the monetary value during the base year is not the same as the current year due to the inflationary or deflationary pressures which changes the value of money or currency over time.Therefore,consequently,the market value or price level of the goods and services has also changed over the same timeline and it cannot be said that the GDP level has simply doubled from the base year to the current year just based on the nominal GDP of both the years.