Answer:
Nominal gdp in year 1 = $10
Real gdp in year 1 = $10
GDP deflator in year 1 = 100
Nominal gdp in year 2 = $32
Real GDP in year 2 =$20
GDP deflator in year 2 =160
Nominal gdp in year 3 = $60
Real gdp in year 3 = $30
GDP deflator in year 3 = 200
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Nominal GDP is GDP calculated using current year prices while Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation.
Nominal GDP = current year price x quantity produced
Real GDP = base year price x quantity produced
GDP deflator = (nominal GDP / real GDP) x 100
Nominal gdp in year 1 = (2 x $5) = $10
Real gdp in year 1 = (2 x $5) = $10
GDP deflator in year 1 =( $10 /$10 ) x 100 = 100
Nominal gdp in year 2 = (4 x $8) = $32
Real GDP in year 2 = 4 x $5 = $20
GDP deflator in year 2 = ($32 / $20) x 100 = 160
Nominal gdp in year 3 = 6 X $10 = $60
Real gdp in year 3 = 6 x$5 = $30
GDP deflator in year 3 = ($60 / $30) x100 = 200
