ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The Bahamas has a GDP of $5, 696, 000, 000, an inflation rate of 1.2%, and a population of 305, 700. Calculate the real GDP.
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$5, 627, 502, 000
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$5, 728, 551, 000
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$5, 627, 648, 000
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$5, 622, 648, 000
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Explanation:
Detailed explanation-1: -GDP Price Deflator = (Nominal GDP ÷ Real GDP) × 100 This will give you the rate of inflation in terms of GDP, which takes far more data into account that the CPI-based alternative.
Detailed explanation-2: -How to Calculate Real GDP. The formula for real GDP is nominal GDP divided by the deflator: R = N/D. $19.073 trillion = $21.427 trillion/1.1234.
Detailed explanation-3: -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.
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