If nominal Gross Domestic Product (GDP) in 2008 was $500 billion with a price index of 100, what would be the real Gross Domestic Product (GDP) in 2018 if the 2018 nominal Gross Domestic Product (GDP) was $900 billion and the 2018 price index was 140?

Question

Quizplus · Accepted Answer

To calculate real GDP in 2018, we need to adjust the nominal GDP for inflation using the price index.

Real GDP = (Nominal GDP / Price Index) x 100

Real GDP in 2008 = (500 / 100) x 100 = $500 billion
Real GDP in 2018 = (900 / 140) x 100 = $642.86 billion

Therefore, the closest answer choice is D) $643 billion.

If Nominal Gross Domestic Product (GDP) in 2008 Was $500