Question

18) 18) Nominal GDP 2001 2002 2003 in billions of dollars) GDP deflater CPI 128.3 131.7 136.5 $ 5,900 6,300 6,800 120.1 123.0 126.3 Table 7.2 GDP for Newland Based on Table 7.2, the real GDP for 2003 was A) $9,282.0 billion. C) $5,384.0 billion. B) $4,981.7 billion. D) $8,588.4 billion. 19) 19) A sudden increase in inflation, ceteris paribus, A) Raises the CPI and reduces real income. B) Reduces the nominal income of those who have constant real incomes. C) Makes everyone worse off. D) Raises the real income of lenders relative to borrowers 20) The amount of money income received in a given time period, measured in current 20) dollars, is B) Relative income. D) The Consumer Price Index. A) Nominal income. C) Real income 21) A friend tells you that his income has risen every year by 5 percent. At the same time,21) prices, on average, have risen by 5 percent. Your friend claims he is better off. Your friend A) Has experienced an increase in nominal and real income. B) Really is better off as he suggests. C) Is experiencing money illusion. D) Has experienced an increase in real income only. 22) Relative price is A) The price of one good in comparison with the price of other goods.
Can someone explain how to do number 18

Answer 1

Real GDP = nominal GDP/GDP deflator times 100 for 2003 real GDP = 6.800/126.3 times 100 = 5,384.0 the correct option is C) $5,384.0 billion