Question

Answer the questions, based on the following information.


Year
Nominal
GDP (bill.)
Price
Index (GDP deflator)
Real
GDP (bill.)

Year 1
$4,486.0
108


Year 2
$4,710.3
112







(i) Between Year 1 and Year 2, nominal GDP has (increased/decreased) by %.

Answer 1

(i) Between Year 1 and Year 2, nominal GDP has increased by
(4,710.3/4,486.0 -1)*100%=5%