ECONOMICS
BUSINESS CYCLES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
The nominal GDP for the year 2010 is $120 billion and the nominal GDP for the year 2012 is $240 billion. Assuming that the year 2010 is the base year and that the real GDP of the year 2012 is $200, what is the GDP deflator in 2012?
|
|
50
|
|
|
100
|
|
|
120
|
|
|
150
|
|
|
200
|
Explanation:
Detailed explanation-1: -The nominal GDP for the year 2010 is $120 billion and the nominal GDP for the year 2012 is $240 billion.
Detailed explanation-2: -In general, calculating real GDP is done by dividing nominal GDP by the GDP deflator (R). For example, if an economy’s prices have increased by 1% since the base year, the deflating number is 1.01. If nominal GDP was $1 million, then real GDP is calculated as $1, 000, 000 / 1.01, or $990, 099.
There is 1 question to complete.