A country has a Gross Domestic Product (GDP) of $225. If the GDP deflator is 3, what would be the real GDP of the country?

Question

asked Apr 20, 2020 72.0k views

2 Answers

Teki · Answer 1 · 2020-04-26T01:31:51+0000

The real GDP of the country is
$\$75$

Solution:

The formula for evaluating the real Gross Domestic product is Nominal Gross Domestic product divided by deflator that is,

R=(N)/(D)

where R is Real GDP; N is Nominal GDP; D is Deflator

Given, Nominal GDP =
$\$225$

Deflator = 3

On subtituting the given values in the formula we get,

R=(225)/(3)=75

The real GDP of a country measures the value of its economic activity.