Table 7.1 GDP
$$\begin{array} { | l | r | r | r | }
\hline & \begin{array} { c }
\text { Nominal GDP(in billions of } \
\text { dollars) }
\end{array} & \text { GDP deflator } &{ \text { CPI } } \
\hline 2002 & \$ 6,992.4 & 106.2 & 151.6 \
\hline 2003 & 7,431.6 & 109.1 & 153 .6 \
\hline 2004 & 7,843.2 & 112.3 & 157 .8 \
\hline
\end{array}$$ Based on Table 7.1,the real GDP for 2003 was
A)$4,832.0 billion.
B)$6,811.7 billion.
C)$6,584.2 billion.
D)$6,984.1 billion.

Question

Table 7.1 GDP
$$\begin{array} { | l | r | r | r | } 
\hline & \begin{array} { c } 
\text { Nominal GDP(in billions of } \
\text { dollars) }
\end{array} & \text { GDP deflator } &{ \text { CPI } } \
\hline 2002 & \$ 6,992.4 & 106.2 & 151.6 \
\hline 2003 & 7,431.6 & 109.1 & 153 .6 \
\hline 2004 & 7,843.2 & 112.3 & 157 .8 \
\hline
\end{array}$$ Based on Table 7.1,the real GDP for 2003 was
A)$4,832.0 billion.
B)$6,811.7 billion.
C)$6,584.2 billion.
D)$6,984.1 billion.

Quizplus · Accepted Answer

Real GDP is calculated by dividing the nominal GDP by the GDP deflator (then multiplying by 100 to adjust for the percentage). For 2003, the nominal GDP is \$7,431.6 billion and the GDP deflator is 109.1. Thus, real GDP for 2003 is $(7431.6 / 109.1) \times 100 = \$6,811.7 billion$.

Table 71 GDP Based on Table 7