Question

Q5 Consider the following data on Malaysia's GDP :
Year Norminal GDP (in billion) GDP deflator
2005 495,239 189
2006 546,343 197
a) what is the growth rate of norminal GDP between 2005 and 2006 ( note: the growth rate is the percentage change from one period to the next )
b) what is the growth rate of the GDP deflator between 2005 and 2006?

Answer 1

a)The growth rate of nominal GDP is ((546,343/495,239)-1)×100=10.32%

b) The growth rate of GDP deflator is (197/189-1)×100=4.23%