Question

Suppose that in 2018, nominal Gross Domestic Product (GDP) for the economy of Chiconia was $10 trillion and the Gross Domestic Product (GDP) price index was 200.0. What is Chiconia's real Gross Domestic Product (GDP) in 2018?

Answer 1

Chiconia's real Gross Domestic Product (GDP) in 2018 is 0.05 Trillion or $ 50 billions

Step-by-step explanation:

Real Domestic Product is GDP adjusted by price levels and can be found as:

Real GDP = Nominal GDP / Price Index

so in this case

Real GDP = $10 trillion / 200 = 0.05 Trillion or $ 50 billions

GDP is a measure of the monetary value of the production an economy that can be large either by an increase in production or in the prices you are selling . Real GDP always makes that adjustment.