?Real gross domestic product is a better indicator of economic growth than
nominal gross domestic product?. Do you agree with the given statement?
Support your answer with a suitable numerical example.

Dear Student,
Yes, the given statement, " Real GDP is better indicator of economic growth than nominal GDP".This is because it is not affected by the general price level.
Numerical Example :
Goods   Price Of Current Year( P1) Price of Base Year (P0) Quantity of Current Goods (Q1) Nominal GDP (P1Q1) Real GDP (P0Q1)
     10     10     200       2000    2000
    Y       20       5     300           6000      1500
    Z      40      20        50        2000      1000
        ΣP1Q1 =           10,000 ΣP0Q1 =        4500

In the above example the difference between Real GDP (∑P0Q1) and Nominal GDP (∑P1Q1) is 10,000-4500 = ₹5,500. This is only the monetary difference as the quantity sold in the market remains unchanged and the variation in the value of GDP is merely due to the change in the prices in the economy. 


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