What is Iceland's real GDP if its nominal GDP is $25.9 billion (in current US$) and the GDP deflator is 124.5?
A)$25.9 billion
B)$24.5 billion
C)$20.8 billion
D)$32.2 billion

Question

Quizplus · Accepted Answer

Real GDP can be calculated by dividing Nominal GDP by the GDP deflator and then multiplying it by 100. So, Real GDP = (Nominal GDP/GDP deflator) x 100
Real GDP = (25.9 billion/124.5) x 100
Real GDP = $20.8 billion. Therefore, option C is the correct answer.

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