What is Uganda's real GDP if its nominal GDP is $27.5 billion (in current US$), and the GDP deflator is 163.4?
A)$44.9 billion
B)$16.8 billion
C)$27.5 billion
D)$12.4 billion

Question

Quizplus · Accepted Answer

Real GDP is calculated by dividing nominal GDP by the GDP deflator (which represents the overall inflation rate).

Real GDP = Nominal GDP / GDP Deflator 
Real GDP = $27.5 billion / 163.4 
Real GDP = $168,250,077.41 million
Real GDP = $16.8 billion (rounded to the nearest tenth)

Therefore, the best choice is B, as it represents the true (inflation-adjusted) size of Uganda's economy.

What Is Uganda's Real GDP If Its Nominal GDP Is