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. includes indirect taxes

B. is measured at base year prices

C. includes depreciation

D. is measured at current year prices

Answer: Option B

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 'Goods and Services Tax' registration threshold for goods suppliers is generally:

A. Rs 40 lakh

B. Rs 20 lakh

C. Rs 50 lakh

D. Rs 1 crore

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Correct Answer: Option A

Explanation:
The GST threshold for goods is Rs 40 lakh (Rs 20 lakh in special category states).

This question belongs to: Economy GK Economy Set 1

Question #2

The 'outcome budget' presents:

A. only capital receipts

B. only revenue receipts

C. expected outcomes of government programmes

D. only financial outlays

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Correct Answer: Option C

Explanation:
An outcome budget links financial outlays with expected outcomes of government schemes.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a characteristic of the 'Life-Cycle Hypothesis' of consumption?

A. Individuals plan consumption over their entire lifetime

B. Only permanent income matters and age is irrelevant

C. Saving is independent of age

D. Consumption depends only on current income

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Correct Answer: Option A

Explanation:
The life-cycle hypothesis, associated with Modigliani, posits that individuals smooth consumption over their lifetime by saving during working years and dissaving during retirement.

This question belongs to: Economy GK Economy Set 1

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