A country's real GDP rose from 500 to 550 while its nominal GDP rose from 600 to 770. What was this country's inflation rate?

Question

Quizplus · Accepted Answer

The inflation rate can be calculated using the formula: [(Nominal GDP growth rate - Real GDP growth rate) / (1 + Real GDP growth rate)] * 100. The nominal GDP growth rate is (770-600)/600 = 28.33%, and the real GDP growth rate is (550-500)/500 = 10%. Thus, the inflation rate is approximately 16.7%.

A Country's Real GDP Rose from 500 to 550 While