Question

Suppose nominal GDP in the base year was $380 million. Five years later, nominal GDP was $480 billion and the GDP price index was 120. Over those five years, real GDP: Group of answer choices increased by $80 billion

Answer 1

Answer: increased by $20 billion

Explanation:

Real GDP is year of interest is:

= (Nominal GDP in year of interest/ GDP Price index in year of interest) * 100

= 480/120 * 100

= $400 billion

Nominal GDP is equal to Real GDP in base year so increase in real GDP is:

= 400 - 380

= $20 billion