ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The Nominal GDP is higher in year 2 compared to Nominal GDP in year 1.
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The Nominal GDP is higher in year 2 compared to real GDP in year 1.
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The Nominal GDP is lower in year 2 compared to the Nominal GDP in year 1.
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The real GDP in year 2 is higher to the real GDP in year 1.
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Detailed explanation-1: -Real GDP can be calculated by taking the difference between the most recent year’s real GDP and the prior year’s real GDP. Then, divide this difference by the prior year’s real GDP. Alternatively, real GDP can be determined if nominal GDP and the prevailing inflation rate are known.
Detailed explanation-2: -percentage change chain-weighted real GDP from year 1 to year 2 is therefore 100.8%.
Detailed explanation-3: -To calculate the real GDP growth rate, you will base your calculation on real GDP figures as shown below: Real GDP growth rate = (most recent years real GDP-the last years real GDP) / the previous years real GDP.
Detailed explanation-4: -It can be calculated by (1) finding real GDP for two consecutive periods, (2) calculating the change in GDP between the two periods, (3) dividing the change in GDP by the initial GDP, and (4) multiplying the result by 100 to get a percentage.