Question

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?

Answer 1

75

Step-by-step explanation:

You just divide!

Answer 2

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.