Question

The following table shows nominal GDP and an appropriate price index for a 5 year period. Using the values in the table, calculate the value of real GDP for each year. Enter your response at whole numbers) dominal GOP Real GDP (illions Mons of dollars) Price Index of dollars) The economy above has experience OA rising price level O ring real GOP throughout the son of rang real GDP in only some of the O Click to select your answers) o for Later

Answer 1

Real GDP can be calculated as follows -

Real GDP = Nominal GDP * (100/Price index)

For instance, in Year 1, nominal GDP is $543 billion and price index is 140.

Real GDP = Nominal GDP * (100/Price index)

Real GDP = $543 billion * (100/140) = $387.85 billion

Similarly, real GDP for other years can be calculated.

Following is the complete table -

Year	Nominal GDP	Price Index	Real GDP
1	$543	140	$387.85
2	$624	149	$418.79
3	$674	139	$484.89
4	$755	149	$506.71
5	$898	164	$547.56

The above table shows that real GDP is increasing per year.

So,

The economy above has experienced a rising real GDP throughout the span of years.

Hence, the correct answer is the option (B)