Table 5-4
Use the following table to answer the following questions.
-Refer to the Table 5-4.Using 2013 as the base year,what can we conclude for 2014?
A) Real GDP is $880,and the GDP deflator is 80.
B) Real GDP is $880,and the GDP deflator is 95
C) Real GDP is $880,and the GDP deflator is 125
D) Real GDP is $950,and the GDP deflator is 95.

Question

Table 5-4
Use the following table to answer the following questions. 
-Refer to the Table 5-4.Using 2013 as the base year,what can we conclude for 2014?
A) Real GDP is $880,and the GDP deflator is 80. 
B) Real GDP is $880,and the GDP deflator is 95 
C) Real GDP is $880,and the GDP deflator is 125 
D) Real GDP is $950,and the GDP deflator is 95.

Quizplus · Accepted Answer

Real GDP is calculated using the base year prices, and the GDP deflator is calculated as (Nominal GDP/Real GDP) x 100. Given the options, only option C correctly reflects a GDP deflator of 125, which indicates that nominal GDP is 25% higher than real GDP.

Table 5-4 Use the Following Table to Answer the Following Questions