Question

If real GDP in a year was $3,668 billion and the price index was 112, then nominal GDP in that year was approximately:

$3,846 billion
$3,925 billion
$4,108 billion
$4,379 billion

Answer 1

To calculate the nominal GDP, we multiply the real GDP by the price index. In this case, the price index is 112. So, if the real GDP is $3,668 billion, the approximate nominal GDP in that year would be $4,108 billion.

Step-by-step explanation:

To calculate the nominal GDP, we multiply the real GDP by the price index. In this case, the price index is 112. So, if the real GDP is $3,668 billion, the nominal GDP would be:

Nominal GDP = Real GDP × Price Index/100

Nominal GDP = $3,668 billion × 112/100

Nominal GDP = $4,108 billion

Therefore, the approximate nominal GDP in that year would be $4,108 billion.