Suppose the nominal GDP of an economy was $100 billion in 2016 and $260 billion in 2017.The general price index was 100 in 2016 and 180 in 2017.During 2016-2017, the economy's real GDP rose by:

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Quizplus · Accepted Answer

To find the real GDP growth, first calculate the real GDP for each year by dividing the nominal GDP by the price index (and multiplying by 100 to adjust for the base year). For 2016, real GDP = $100 billion. For 2017, real GDP = ($260 billion / 180) * 100 = $144.44 billion. The growth rate is ((144.44 - 100) / 100) * 100% = 44%.

Suppose the Nominal GDP of an Economy Was $100 Billion