Question

Refer to the data below (all values are in billions): nominal gdp real gdp year gdp year gdp 2000 9,817 2000 12,560 2001 10,128 2001 12,682 2002 10,469 2002 12,909 2003 10,960 2003 13,271 2004 11,685 2004 13,774 2005 12,422 2005 14,234 2006 13,178 2006 14,614 2007 13,808 2007 14,874 2008 14,291 2008 14,830 2009 13,939 2009 14,419 2010 14,527 2010 14,784 2011 15,518 2011 15,021 2012 16,163 2012 15,369 2013 16,768 2013 15,710 (a) using the real gdp data in the table above, by how much did real gdp increase between 2000 and 2013? $ billion (b) by how much did nominal gdp increase between 2000 and 2013? $ billion

Answer 1

When one has a confusing matrix with many entries, we need to seek what we need. We need only 4 values from this table, so identifying this fact makes our job easier.
(a) The real GDP in 2000 was 12,560 billion dollars. The real GDP in 2013 is 15,710. We have that their difference is: ($GDP_{2013} - GDP_{2000}$) which is equal to 3,150 billion dollars.
(b)
The nominal GDP in 2000 was  9,817 billion dollars. The nominal GDP in 2013 is 16,768 billion dollars. Thus, their difference is (using the same formula and thinking as above) 6,951 billion dollars. We observe that the real GDP has increased faster (almost twice as much) as the nominal GDP in the period 2000-2013