Asked by Geairra Wesley on May 06, 2024
Verified
If real gross domestic product (GDP) for a particular year is $5 trillion and the GDP price index for that year is 136,the nominal gross domestic product (GDP) for that year is _____.
A) $3.7 trillion
B) $4 trillion
C) $6.8 trillion
D) $27 trillion
E) $68 trillion
GDP Price Index
An economic metric that measures the changes in prices of all goods and services included in Gross Domestic Product.
Nominal Gross Domestic Product
Gross Domestic Product measured in current market prices, not adjusted for inflation.
Real Gross Domestic Product
An inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year.
- Understand the definitions and differences between nominal GDP and real GDP.
- Develop the skill to determine the GDP price index and grasp its significance.
Verified Answer
CW
Cameron WilhelmMay 08, 2024
Final Answer :
C
Explanation :
Nominal GDP can be calculated using the equation: Nominal GDP = Real GDP x GDP Price Index. Plugging in the given values, Nominal GDP = $5 trillion x 136 = $680 trillion, which is option C.
Learning Objectives
- Understand the definitions and differences between nominal GDP and real GDP.
- Develop the skill to determine the GDP price index and grasp its significance.