If GDP was $10 trillion in 2001 and the GDP deflator was 100 in 2000 and 110 in 2001, what was real GDP?
A) $9.09 trillion
B) $10 trillion
C) $11.1 trillion
D) $110.0 trillion

Question

Quizplus · Accepted Answer

Real GDP in a given year is calculated by dividing the nominal GDP (in current dollars) by the GDP deflator (which is a measure of inflation). In this case, we need to divide the nominal GDP of $10 trillion in 2001 by the GDP deflator of 1.10 (since the GDP deflator was 110 in 2001). This gives us a real GDP of $9.09 trillion.

If GDP Was $10 Trillion in 2001 and the GDP