If the GDP deflator is 200 and real GDP is $40 billion, then nominal GDP is:
A)$8000 billion
B)$20 billion
C)$80 billion
D)$2000 billion

Question

Quizplus · Accepted Answer

The GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy. It is calculated as (Nominal GDP / Real GDP) * 100. Given the GDP deflator is 200, and Real GDP is $40 billion, we can rearrange the formula to solve for Nominal GDP: Nominal GDP = (GDP Deflator * Real GDP) / 100 = (200 * $40 billion) / 100 = $80 billion.

If the GDP Deflator Is 200 and Real GDP Is