Real GDP differs from nominal GDP because real GDP: MCQ with Answer and Explanation

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Real GDP differs from nominal GDP because real GDP:

A. is measured at current year prices

B. includes depreciation

C. is measured at base year prices

D. includes indirect taxes

Answer: Option C

Solution (By JKSSB Mock Tests)

Real GDP is valued at constant base year prices to remove the effect of inflation.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The term 'Seigniorage' refers to:

A. Interest paid on government bonds

B. Profit earned by the government from printing currency

C. Revenue from income tax

D. Deficit financing through external loans

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Correct Answer: Option B

Explanation:
Seigniorage is the difference between the face value of money and the cost of producing it; it represents the real resource gain to the government from issuing currency.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Marine Products Export Development Authority' promotes exports of:

A. coffee

B. spices

C. tea

D. fish and marine products

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Correct Answer: Option D

Explanation:
MPEDA promotes exports of fish and marine products.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Vote on Account' is used to:

A. reduce fiscal deficit

B. present the full budget for the year

C. obtain Parliament's approval for expenditure for part of the financial year

D. impose new taxes

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Correct Answer: Option C

Explanation:
Vote on Account authorizes government expenditure for a limited period, usually before elections.

This question belongs to: Economy GK Economy Set 1

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