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UPSC 2000: The growth rate of per capita income at current prices is higher than that of per capita income at constant prices, because the latter takes into account the rate of
(a)growth of population
(b)increase in price level
(c)growth of money supply
(d)increase in the wage rate
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Not attemptedCorrect Answer: (b) increase in price level
Growth measured at constant prices is adjusted for inflation, so it nets out the rate of increase in the general price level; current-price (nominal) growth therefore appears higher because it includes that inflation component. Hence the gap arises from accounting for the rise in prices. ([selfstudyhistory.com](https://selfstudyhistory.com/2015/04/06/prelims-ias-general-studies-solved-paper-with-explanations-2000-part-3/))
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Frequently Asked Questions
What is the correct answer to this UPSC 2000 Indian Economy question?▼
The correct answer is option (b): increase in price level. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this National Income & Economic Growth question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2000, GS Paper 1, as Question 49. It falls under Indian Economy > National Income & Economic Growth.
What is the difficulty level of this UPSC question?▼
This question is rated "easy". It tests basic recall and most well-prepared aspirants should answer it correctly.
How many UPSC Prelims questions have been asked from National Income & Economic Growth?▼
UPSC has asked 37 questions from National Income & Economic Growth (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.