Answer to Question #160944 in Microeconomics for Rubab

Question

If the nominal GDP for this year is higher than the GDP of Base year 1993 .does it necessarily means the economy is producing more ?

Answer 1

An increase in GDP does not necessarily mean a nation has produced more output; it must be specified whether the GDP in question is nominal or real. An increase in nominal GDP may just mean prices have increased, while an increase in real GDP definitely means output increased.