Suppose nominal GDP was $360 billion in 1990 and $450 billion in 2000.The appropriate price index (1985 = 100) was 120 in 1990 and 125 in 2000.Between 1990 and 2000, real GDP

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Real GDP increased by $60 billion between 1990 and 2000. This is because nominal GDP increased by $90 billion (from $360 billion to $450 billion), but the price index also increased by 5 points (from 120 to 125). This means that the real value of GDP increased by less than the nominal value.

Suppose Nominal GDP Was $360 Billion in 1990 and $450