Examkin

Soru

Zorluk: ZorEconomic Growth, National Income Accounting, and Development Indicators

Consider the following statements regarding National Income Accounting identities and price deflators in India:

1. The GDP deflator measures the price changes of all domestically produced goods and services in an economy, whereas the Consumer Price Index (CPI) reflects the price changes of a fixed basket of goods and services, including imported consumer goods.
2. If an economy experiences a nominal GDP increase due solely to price inflation while real GDP remains constant, the calculated GDP deflator value will remain unchanged at 100.
3. Under India's revised national accounts methodology, Gross Value Added (GVA) at basic prices includes net production taxes (production taxes minus production subsidies) but excludes net product taxes (product taxes minus product subsidies).

Which of the statements given above is/are correct?

  1. 1 and 3 onlyCevap
  2. B
    1 and 2 only
  3. C
    2 and 3 only
  4. D
    1, 2 and 3

Cevap

Statements 1 and 3 are correct. The GDP deflator covers all domestically produced goods and services, whereas CPI includes imported consumption goods. GVA at basic prices equals GVA at factor cost plus production taxes minus production subsidies, excluding product taxes/subsidies.
The option stating '1 and 3 only' is correct. Statement 1 accurately captures the key structural differences between the GDP deflator (domestic production, dynamic weights) and the Consumer Price Index (includes imports, fixed basket). Statement 3 correctly identifies the official NSO formula for GVA at basic prices, which incorporates production taxes/subsidies but leaves out product taxes/subsidies. Statement 2 is false because a rise in nominal GDP alongside constant real GDP increases the ratio (Nominal GDP/Real GDP)×100(\text{Nominal GDP} / \text{Real GDP}) \times 100, raising the GDP deflator above 100.

Adım Adım Çözüm

1
Analyze Statement 1 regarding the scope of GDP Deflator versus CPI.
Statement 1 is correct. The GDP deflator covers the price changes of all domestically produced final goods and services within GDP, whereas CPI tracks a representative basket of consumer items that includes imported consumer goods.
Understanding basket composition and import inclusions is essential to comparing implicit deflators with explicit price indices.
2
Evaluate Statement 2 using the formula for the GDP Deflator.
Statement 2 is incorrect. The GDP deflator is defined as GDP Deflator=(Nominal GDPReal GDP)×100\text{GDP Deflator} = \left( \frac{\text{Nominal GDP}}{\text{Real GDP}} \right) \times 100. If nominal GDP grows due to inflation while real GDP is constant, the ratio increases above 100.
The GDP deflator measures price changes relative to a base year; pure price inflation drives nominal GDP up, increasing the deflator value.
3
Evaluate Statement 3 using the National Accounts Statistics framework for GVA at basic prices.
Statement 3 is correct. GVA at basic prices=GVA at factor cost+(Production Taxes−Production Subsidies)\text{GVA at basic prices} = \text{GVA at factor cost} + (\text{Production Taxes} - \text{Production Subsidies}). Product taxes and subsidies (such as GST or excise duties on specific goods) are added/subtracted only when moving from GVA at basic prices to GDP at market prices.
Production taxes (e.g., land revenues, stamp duty) are independent of production volume, while product taxes (e.g., GST) depend on output quantity.

Anahtar Kavram

National Income Accounting aggregates, GDP Deflator vs CPI, and GVA at Basic Prices
Bu soruyu puanla

Konular

Economic Growth, National Income Accounting, and Development Indicators