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diamong [38]
3 years ago
5

If inflation is 2% and nominal GDP grew by 4% then during the same period real GDP changes by how much?

Social Studies
2 answers:
podryga [215]3 years ago
6 0

Answer:B. 2%

Explanation:

Naily [24]3 years ago
3 0

The answer is 2%.

In order to find the real GDP figure, <u>the Fisher equation</u><u> needs to be applied as follows:</u>

r= i - π

where,

  • r is the real interest rate
  • i stands for the norminal interest rate
  • π stands for the inflation rate

Therefore:

r= i - π = 4% - 2%= 2%

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