Match List-I with List-II.List-IList-II(A) Nominal GDP(I) Ratio of no…

Match List-I with List-II.

List-I	List-II
(A) Nominal GDP	(I) Ratio of nominal GDP to real GDP
(B) Real GDP	(II) GDP valued at current prevailing prices
(C) GDP deflator	(III) Year whose prices are used to calculate real GDP
(D) Base year	(IV) GDP valued at a constant set of prices

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → (A)-(II), (B)-(IV), (C)-(I), (D)-(III)

Nominal GDP uses current prices, real GDP uses constant prices of a base year, and their ratio is the GDP deflator.

List-I	List-II	Reason
(A) Nominal GDP	(II) GDP valued at current prevailing prices	Nominal GDP is GDP at the current prevailing prices.
(B) Real GDP	(IV) GDP valued at a constant set of prices	Real GDP values goods at a constant set of prices.
(C) GDP deflator	(I) Ratio of nominal GDP to real GDP	The deflator is the ratio of nominal to real GDP, an index of prices.
(D) Base year	(III) Year whose prices are used to calculate real GDP	The base year is the year whose prices are used for real GDP.

NCERT (2026-27): “2.4 Nominal and Real GDP … For comparison we take the help of real GDP. Real GDP is calculated in a way such that the goods and services are evaluated at some constant set of prices (or constant prices). Since these prices remain fixed, if the Real GDP changes we can be sure that it is the volume of production which is undergoing changes. Nominal GDP, on the other hand, is simply the value of GDP at the current prevailing prices. For example, suppose a country only produces bread. In the year 2000 it had produced 100 units of bread, price was Rs 10 per bread. GDP at current price was Rs 1,000. In 2001 the same country produced 110 units of bread at price Rs 15 per bread. Therefore nominal GDP in 2001 was Rs 1,650 (=110 × Rs 15). Real GDP in 2001 calculated at the price of the year 2000 (2000 will be called the base year) will be 110 × Rs 10 = Rs 1,100. Notice that the ratio of nominal GDP to real GDP gives us an idea of how the prices have moved from the base year (the year whose prices are being used to calculate the real GDP) to the current year. In the calculation of real and nominal GDP of the current year, the volume of production is fixed. Therefore, if these measures differ it is only due to change in the price level between the base year and the current year. The ratio of nominal to real GDP is a well known index of prices. This is called GDP Deflator. …”