Suppose nominal GDP for an economy rose from $120 billion in 2016 to $150 billion in 2017 and that the inflation rate over the same period was 5 percent.
-Refer to the information above to answer this question.By what percentage did real GDP increase between 2016 and 2017?

Question

Quizplus · Accepted Answer

To find the percentage increase in real GDP, first adjust the 2017 nominal GDP for inflation: $150 billion / 1.05 = approximately $142.86 billion. The real GDP increase is then ($142.86 billion - $120 billion) / $120 billion = 0.189 or 18.9%, which is closest to 20%.

Suppose Nominal GDP for an Economy Rose from $120 Billion