Asked by theresa betty on May 17, 2024
Verified
If the nominal gross domestic product (GDP)for a particular year is $4 trillion and the real GDP for that year is $3 trillion,then the GDP price index is 133.
Nominal Gross Domestic Product (GDP)
A rephrased term for Nominal GDP, referring to the market value of all final goods and services produced within a country in a year, unadjusted for inflation.
GDP Price Index
An economic metric that accounts for inflation by converting output measured at current prices into constant-dollar GDP.
- Identify the differences among nominal GDP, real GDP, and the GDP price index, highlighting their importance in the evaluation of economic developments.
Verified Answer
QE
Queenie EsperanceMay 19, 2024
Final Answer :
True
Explanation :
GDP price index (also known as the GDP deflator) is calculated by dividing nominal GDP by real GDP and multiplying by 100.
Therefore, GDP price index = (nominal GDP/real GDP) x 100
= (4 trillion/3 trillion) x 100
= 133.33
Rounded to the nearest whole number, the GDP price index is 133.
So, the statement is true.
Therefore, GDP price index = (nominal GDP/real GDP) x 100
= (4 trillion/3 trillion) x 100
= 133.33
Rounded to the nearest whole number, the GDP price index is 133.
So, the statement is true.
Learning Objectives
- Identify the differences among nominal GDP, real GDP, and the GDP price index, highlighting their importance in the evaluation of economic developments.
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