If the price index was 100 in 1991 and 120 in 2001,and nominal GDP was $360 billion in 1991 and $480 billion in 2001,then the value of 2001 GDP in terms of 1991 dollars would be
A)$300 billion.
B)$384 billion.
C)$400 billion.
D)$424 billion.

Question

Quizplus · Accepted Answer

To find the real GDP in 2001 in terms of 1991 dollars, adjust the nominal GDP of 2001 by the price index. The formula is: Real GDP = Nominal GDP / (Price Index/100). So, $480 billion / (120/100) = $400 billion.

If the Price Index Was 100 in 1991 and 120