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GDP: Constant & Current Prices (for UPSC CSE)
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This lesson explains the concept of Gross Domestic Product. It highlights Constant Prices, which is the total quantity of all final goods and services produced in a particular year multiplied by the price of the base year and Current Prices, which is basically the maximum retail price. Both the concepts are explained through examples.

Israel Jebasingh
Director of Officers IAS Academy. IAS Officer of 2004 Batch with AIR 59.

U
Unacademy user
Your initiative is making a lot of difference. Thank u ma'am. God bless u all!
thank you sir :) Sir,I have one doubt while calculating real GDP we take constant price into consideration of some fixed year as now it is of 2011-12. What will happen if there is some new product comes into picture i.e let product 'X' is start manufacturing from year 2013 ? Do we need to take its current value at each and every consequent year or fix it's value at the starting year while calculating GDP ?
Sir Your lessons are awsome..students with science background will love economics now...expecting more and more lessons from you sir..great job.
sir the lessons were truely amazing.... waiting for more of them .. thank you sir
thank u sir for such a beautiful lecture
Thank you so much sir......you cleared the whole concept very nicely...It helped alot..Please continue with the series.
  1. CONSTANT CURRENT PRICES



  2. UANTITy PRicE GDP PRICE DP 1O00 BAGS x Ro 500 - Rs,5,00,000



  3. UANTITY PRICe GDP 700 BAGS x Rs 800 = Rs 5,60,000


  4. UANTITY PRICE DP 2.015-101 OOO BAGs x Rs 00 Rs, ,00,000 GUANTITY PRICe GDP IcE 2.0)6-17 700 BAGS x Rs 800 = Rs 5,60,000


  5. C ONSTANT GUANTITY PRIce (2-2) ICe (2011-1 3 LAKHs 2


  6. Constant Price The national income at constant price means the total quantity of all final goods and services produced in particular year multiplied by the price of base year(constant price) The national income calculated by this method is called the real income


  7. Current price is ,basically, the maximum retail price(MRP)which we see printed on the goods selling in the market National income calculated by this method is called the nominal income .As per the new guidelines the base year in India has been revised from 2004-05 to 2011-12 . India calculates its national income at constant prices