Question

The GDP price index in the United States in 2016 was about 106 ​, and real GDP in 2016 was ​$17.7 trillion​ (2012 dollars). The GDP price index in the United States in 2018 was about 110 ​, and real GDP in 2018 was ​$18.6 trillion​ (2012 dollars). Calculate nominal GDP in 2016 and in 2018 and the percentage increase in nominal GDP between 2016 and 2018 .

Answer 1

The nominal GDP in 2016 was $18.762 trillion and in 2018 it was $20.46 trillion. The percentage increase in nominal GDP between 2016 and 2018 is 9.05%.

Step-by-step explanation:

The nominal GDP is the value of goods and services produced in an economy, measured in current prices. To calculate the nominal GDP for 2016, we multiply the real GDP (in 2012 dollars) by the GDP price index (106/100). So, the nominal GDP for 2016 is $17.7 trillion * 106/100 = $18.762 trillion.

Similarly, to calculate the nominal GDP for 2018, we multiply the real GDP (in 2012 dollars) by the GDP price index (110/100). So, the nominal GDP for 2018 is $18.6 trillion * 110/100 = $20.46 trillion.

The percentage increase in nominal GDP between 2016 and 2018 can be calculated using the formula: ((new value - old value) / old value) * 100. So, the percentage increase in nominal GDP is ((20.46 - 18.762) / 18.762) * 100 = 9.05%.

Answer 2

9.05%

Step-by-step explanation:

in nominal dollars, the 2016 GDP was $17.7 trillion x 1.06 = $18.762 trillion

in nominal dollars, the 2018 GDP was $18.6 trillion x 1.1 = $20.46 trillion

the percentage increased in nominal GDP between 2016 and 2018 was ($20.46 trillion - $18.762 trillion) / $18.762 trillion = 0.0905 ≈ 9.05%