In year one,the GDP deflator is 100 and in year two 110.If nominal GDP in year two is $300 billion,what is real GDP for year two?

Name: In year one,the GDP deflator is 100 and in year two 110.If nominal GDP in year two is $300 billion,what is real GDP for year two?
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Quizplus · Accepted Answer

The GDP deflator is used to convert nominal GDP into real GDP. The formula is: Real GDP = Nominal GDP / (GDP Deflator / 100). For year two, Real GDP = $300 billion / (110 / 100) = $300 billion / 1.1 = $272.73 billion.

In Year One,the GDP Deflator Is 100 and in Year