Question
Consider the following statements. Assertion
(A): Real GDP provides a better picture of the economy than nominal GDP. Reason (R): Real GDP is calculated in a way such that the goods and services are evaluated after deducting the loss after depreciation. Select the correct option from the given codes:Solution
Real GDP : Real GDP is calculated in a way such that the goods and services are evaluated at some constant set of prices (or constant prices). Since these prices remain fixed, if the Real GDP changes we can be sure that it is the volume of production which is undergoing changes.
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