What is the value of Real GDP in 2008 if Nominal GDP was 1 131 586 ($million) and CPI was 161.4?
A)701 million dollars
B)7 011 million dollars
C)701 107 million dollars
D)None of these choices are correct.

Question

Quizplus · Accepted Answer

To calculate Real GDP using the GDP deflator, we need to divide Nominal GDP by CPI and multiply by 100. 
Real GDP = (Nominal GDP/CPI) * 100
Real GDP = (1,131,586/161.4) * 100
Real GDP = 7,011 million dollars (rounded to the nearest million)
Therefore, the correct choice is C.

What Is the Value of Real GDP in 2008 If