Table 10-3
The table below reports nominal and real GDP for the U.S. from 1929 to 1932. $$\begin{array} { c c c }
\hline \text { Year } & \begin{array} { c }
\text { Nominal } \
\text { GDP }
\end{array} & \text { Real GDP } \
\hline 1929 & 103.6 & 977 \
1930 & 91.2 & 892.8 \
1931 & 76.5 & 834.9 \
1932 & 58.7 & 725.8 \
\hline
\end{array}$$
-Refer to Table 10-3. What was the growth rate of real GDP for 1931?

Question

Table 10-3
The table below reports nominal and real GDP for the U.S. from 1929 to 1932. $$\begin{array} { c c c } 
\hline \text { Year } & \begin{array} { c } 
\text { Nominal } \
\text { GDP }
\end{array} & \text { Real GDP } \
\hline 1929 & 103.6 & 977 \
1930 & 91.2 & 892.8 \
1931 & 76.5 & 834.9 \
1932 & 58.7 & 725.8 \
\hline
\end{array}$$
-Refer to Table 10-3. What was the growth rate of real GDP for 1931?

Quizplus · Accepted Answer

To calculate the growth rate of real GDP for 1931, we need to use the formula (Real GDP in 1931 - Real GDP in 1930)/Real GDP in 1930 x 100. Using the values in Table 10-3, we get the growth rate of real GDP for 1931 as (834.9-892.8)/892.8 x 100 = -6.49%. This means that real GDP contracted by 6.49% from 1930 to 1931. It is always better to use real GDP as a measure of economic well-being because it adjusts for inflation and gives a more accurate picture of changes in the quantity of goods and services produced in an economy. Nominal GDP, on the other hand, does not adjust for inflation and can be misleading when comparing GDP across different time periods.

Table 10-3 the Table Below Reports Nominal and Real GDP

Table 10-3
the Table Below Reports Nominal and Real GDP