(GDP figures are in billions of dollars. )

-Refer to the above table.What was real GDP in Year 2?
A) $4,820 billion
B) $4,875 billion
C) $4,911 billion
D) $5,320 billion

Question

(GDP figures are in billions of dollars. )
 
-Refer to the above table.What was real GDP in Year 2?
A) $4,820 billion 
B) $4,875 billion 
C) $4,911 billion 
D) $5,320 billion

Quizplus · Accepted Answer

Real GDP is calculated by adjusting nominal GDP for inflation. From the table, we can see that the GDP deflator is 102.0 in Year 1 and 104.5 in Year 2. To calculate real GDP for Year 2, we use the formula Real GDP = (Nominal GDP / GDP deflator) x 100. Plugging in the numbers, we get Real GDP = (5,121 / 104.5) x 100 = $4,911 billion. Therefore, the correct answer is C.

(GDP Figures Are in Billions of Dollars. )