Use the following information to answer this question.If nominal GDP rises from $100 trillion to $120 trillion,while the GDP deflator rises from 2.0 to 2.2,the percentage change in real GDP is approximately equal to
A)-10%.
B)10%.
C)20%.
D)9.1%.
E) 0%.

Question

Quizplus · Accepted Answer

Real GDP = Nominal GDP / GDP Deflator
Initial real GDP = $100 trillion / 2.0 = $50 trillion
Final real GDP = $120 trillion / 2.2 = $54.54 trillion
Percentage change in real GDP = ((Final real GDP - Initial real GDP) / Initial real GDP) x 100%
= (($54.54 trillion - $50 trillion) / $50 trillion) x 100%
= 9.1%
Therefore, the answer is D) 9.1%.

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