If real gross domestic product GDP) grew by 2 percent and the inflation rate was 2 percent, then nominal GDP grew by

Question

Quizplus · Accepted Answer

Nominal GDP is the value of goods and services produced in an economy without adjusting for inflation. Nominal GDP can be calculated by multiplying real GDP by the GDP deflator (which is a measure of inflation). In this case, if real GDP grew by 2 percent and the inflation rate was 2 percent, then nominal GDP grew by 4 percent (2% + 2%). Therefore, the correct answer is B.

If Real Gross Domestic Product GDP) Grew by 2 Percent