Suppose 2009 is the base year. From 2009 to 2010, the price index increases from 100 to 102.5. If nominal Gross Domestic Product (GDP) is $2,800 in 2010, then the real Gross Domestic Product (GDP) in 2010 is

Question

Quizplus · Accepted Answer

To calculate real GDP, we need to use the formula:

Real GDP = Nominal GDP / Price Index (in hundredths)

Using the given values, we get:

Real GDP = 2,800 / (102.5/100) = 2,732

Therefore, the real GDP in 2010 is $2,732. Option C is the correct answer.

Suppose 2009 Is the Base Year