In order to convert nominal gross domestic product (GDP)to real gross domestic product (GDP),we must divide:
A)real GDP by the price index.
B)nominal GDP by the price index.
C)the price index by nominal GDP.
D)the price index by real GDP.
E)nominal GDP by 100.

Question

Quizplus · Accepted Answer

To convert nominal GDP to real GDP, we need to adjust for inflation by dividing nominal GDP by the price index. This will give us a measure of economic output that accounts for changes in the overall price level, allowing for more accurate comparisons of economic activity over time.

In Order to Convert Nominal Gross Domestic Product (GDP)to Real