Nominal GDP in 1970 was $1035.6 billion,and in 1980 it was $2784.2 billion.The GDP price index was 30.6 for 1970 and 60.4 for 1980,where 1992 was the base year.Calculate the percent change in real GDP in the decade from 1970 to 1980.Round off to the nearest percentage point.
A)36%
B)97%
C)136%
D)169%

Question

Quizplus · Accepted Answer

To find the percent change in real GDP, first calculate the real GDP for both years using the formula: Real GDP = Nominal GDP / (GDP Price Index / 100). For 1970, Real GDP = $1035.6 billion / (30.6/100) = $3383.66 billion. For 1980, Real GDP = $2784.2 billion / (60.4/100) = $4608.28 billion. The percent change in real GDP = [(4608.28 - 3383.66) / 3383.66] * 100 = 36%.

Nominal GDP in 1970 Was $1035