Explanation Real GDP in the year 1968 can be calculated as follows: Real GDP in 1968 = ( Nominal GDP Price Index ) × 100 = ( 909.8 22.01 ) × 100 = 4 , 133.57 Real GDP is $4,133.57. Hence, Real GDP in 1968 is greater than the nominal GDP. Therefore, the nominal GDP is inflating. Real GDP in the year 1978 can be calculated as follows: Real GDP in 1978 = ( Nominal GDP Price Index ) × 100 = ( 2 , 293.8 40.40 ) × 100 = 5 , 677.722 Real GDP is $5,677.72. Hence, Real GDP in 1978 is greater than the nominal GDP. Therefore, the nominal GDP is inflating. Real GDP in the year 1988 can be calculated as follows: Real GDP in 1988 = ( Nominal GDP Price Index ) × 100 = ( 5 , 100

If the nominal GDP is inflating or deflating.

EBK MACROECONOMICS

21st Edition

ISBN: 8220103959902

Author: McConnell

Publisher: YUZU

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Chapter 7, Problem 7P

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If the nominal GDP is inflating or deflating.

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