Question

If the price index in a country were 100 for the year 2010 and 120 for the year 2015 and nominal gross domestic product in 2015 was $480 billion, then real gross domestic product for 2015 in 2010 dollars would be:

Answer 1

Answer:

The real GDP is $400

Explanation:

The real GDP is the nominal GDP adjusted by inflation. Since the price index is 120 vs 100 from the base year , we have a 20% of inflation , then the real GDP will be = $480/1,20 = $400