Real GDP is given by ________, where the price level is the ________.
A) Real GDP = Nominal GDP $\times$ Price level; CPI
B) Real GDP = Nominal GDP ÷ Price level; GDP deflator
C) Real GDP = Nominal GDP + Price level; GDP deflator
D) Real GDP = Nominal GDP - Price level; GDP deflator
E) Real GDP = Nominal GDP ÷ Price level; CPI

Question

Quizplus · Accepted Answer

Real GDP is calculated by adjusting nominal GDP for price changes, and we do this by dividing nominal GDP by the price level. The GDP deflator is used as the measure of the price level when calculating real GDP.

Real GDP Is Given by ________, Where the Price Level ×\times×

Real GDP Is Given by ________, Where the Price Level $\times$