Asked by Francies Guzman on May 19, 2024
Verified
If the real gross domestic product (GDP)is $5 trillion for a particular year and the GDP price index is 140,then the nominal GDP is $7 trillion.
Real Gross Domestic Product (GDP)
An inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year, showing true growth.
GDP Price Index
A measure that reflects the prices of all goods and services included in the Gross Domestic Product, indicating the overall level of inflation or deflation in an economy.
Nominal GDP
Gross Domestic Product measured in current prices, without adjustment for inflation.
- Differentiate among nominal GDP, real GDP, and the GDP deflator, elucidating their functions in the analysis of economic activities.
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Learning Objectives
- Differentiate among nominal GDP, real GDP, and the GDP deflator, elucidating their functions in the analysis of economic activities.
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