If the price index was 100 in 2000 and 120 in 2010,and nominal GDP was $360 billion in 2000 and $480 billion in 2010,then the value of 2010 GDP in terms of 2000 dollars would be
A)$300 billion.
B)$384 billion.
C)$400 billion.
D)$424 billion.

Question

Quizplus · Accepted Answer

To convert the value of 2010 GDP into 2000 dollars, we need to adjust for inflation by dividing the nominal GDP by the price index and multiplying by 100.

Therefore, the value of 2010 GDP in 2000 dollars would be:

($480 billion / 120) x 100 = $400 billion

So, the correct answer is C.

If the Price Index Was 100 in 2000 and 120