Question

Real GDP is a better indicator of economic growth than nominal growth.Support your answer with a suitable numerical example .

Answer 1

Answer:

Real GDP is calculated taking prices prevailing in a base year. If base year is 2018 in our example, then real GDP will be 100 $ in 2018 and 2019 both which is justified since production is same in both years. This shows that real GDP is a better measure of economic growth than nominal GDP.

Answer 2

Answer:

HOPE IT'S HELPFUL

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