The following table shows nominal GDP and an appropriate price index for a group of selected years. Compute real GDP. Indicate in each calculation whether you are inflating or deflating the nominal GDP data. Instructions: Enter your responses in the gray-shaded cells. Round your answers to 2 decimal places. Nominal GDP, Billions Price Index Year Real GDP, Billions Effect on Nominal GDP (2005 = 100) 1978 $2,298.80 40.4 1988 5,105.40 66.98 1998 8,798.50 85.51 2008 14,446.40 108.48 2018 20,507.10 128.59
The following table shows nominal GDP and an appropriate price index for a group of selected years. Compute real GDP. Indicate in each calculation whether you are inflating or deflating the nominal GDP data. Instructions: Enter your responses in the gray-shaded cells. Round your answers to 2 decimal places. Nominal GDP, Billions Price Index Year Real GDP, Billions Effect on Nominal GDP (2005 = 100) 1978 $2,298.80 40.4 1988 5,105.40 66.98 1998 8,798.50 85.51 2008 14,446.40 108.48 2018 20,507.10 128.59
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The following table shows nominal GDP and an appropriate price index for a group of selected years. Compute real GDP. Indicate in
each calculation whether you are inflating or deflating the nominal GDP data.
Instructions: Enter your responses in the gray-shaded cells. Round your answers to 2 decimal places.
Nominal GDP,
Price Index
Year
Real GDP, Billions
Effect on Nominal GDP
Billions
(2005 = 100)
%3D
1978
$2,298.80
40.4
1988
5,105.40
66.98
1998
8,798.50
85.51
14,446.40
2018
20,507.10
128.59
Expert Solution
Step 1
Real GDP = (Nominal GDP/Deflator)*100
If the Real GDP is greater than nominal, then it is inflating
If the Real GDP is lesser than nominal, then it is deflating
In this case, the price index reflects the GDP deflator's value.
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