Question

Suppose that a nation's nominal GDP is $972 billion and the GDP deflator is 90. In order to make this year's GDP comparable to the reference year GDP, this year's GDP must be:

Select one:

a. adjusted downward to $687 billion

b. deflated to $896 billion

c. inflated to $1080 billion

d. deflated to $875 billion

e. inflated to $896 billion

Answer 1

Answer

comparable GDP means the real GDP

real GDP=(nominal GDP/GDP deflator )*100

=(972/90)*100

=1080

the GDP is $1080 billion

Option c