Real GDP differs from nominal GDP because real GDP measures current production using which basis?
Correct answer: B. Constant prices of a base year
- A. Current prices of the same year
- B. Constant prices of a base year
- C. Market prices after tax collection
- D. Foreign prices converted into rupees
Explanation
Real GDP values goods and services at constant prices from a selected base year, so the effect of inflation is removed. Nominal GDP uses current prices and may rise even when physical production does not increase.
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About Economy of Pakistan
Pakistan's economy is examined through agriculture, industry, services, trade, remittances, employment, population, poverty and regional development. The topic also covers GDP and national income, inflation, fiscal and monetary policy, taxation, public debt, the balance of payments, energy constraints and structural challenges, including the role of the State Bank and development planning.
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