Real GDP is given by ________, where the price level is the ________.
A) Real GDP =Nominal GDP ｴ Price level; CPI
B) Real GDP = Nominal GDP ｸ 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 ｸ Price level; CPI

Question

Quizplus · Accepted Answer

Real GDP is calculated by dividing nominal GDP by the GDP deflator. The GDP deflator is a measure of the overall price level of goods and services produced in an economy. Therefore, the correct formula for calculating real GDP is Real GDP = Nominal GDP/GDP deflator. Choice B is the only option that includes this formula.

Real GDP Is Given by ________, Where the Price Level