From 2009 to 2010, per capita real GDP in the United States grew by 1.8%. Given...

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Question

From 2009 to 2010, per capita real GDP in the United States grew by 1.8%. Given...

From 2009 to 2010, per capita real GDP in the United States grew by 1.8%. Given that prices increased by 1% and the population grew by 1%, we know that nominal GDP grew by

A) 4.8% B) 1.8% C) 2.8% D) 3.8% E) 5.8%

business economics

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Answer 1

Answer #1

Nominal GDP growth does not strip out inflation which can inflate the growth figure.

Hence the nominal GDP growth will be given by

The nominal GDP growth = real GDP growth+ price increase = 1.8%+1% = 2.8%(c)

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Answer 2

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