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Chapter 8: Q.23 (page 188)

Consider Figure 8-4. Explain what is special about the year at which the two data plots cross, and why this is so.

Short Answer

Expert verified

The nominal GDP and real GDP are equal when the two data plots cross.

Step by step solution

01

Introduction

Nominal GDP is an evaluation of monetary creation in an economy yet remembers the ongoing prices of labor and products for its estimation. GDP is normally estimated as the money-related worth of labor and products created.

02

Explanation

The nominal GDP and real GDP are equivalent in 2010 and this is special in the economy as this will happen just when the Market Prices of the Current Year are equivalent to the Market Prices of the Base Year.

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