Table 7.2 GDP for Newland
$$\begin{array} { | l | r | c | r | }
\hline & \begin{array} { c }
\text { Nominal GDP(in billions of } \
\text { dollars) }
\end{array} & \text { GDP deflator } & \multicolumn{2}{|c|} { \text { CPI } } \
\hline 2001 & \$ 5,900 & 120.1 & 128.3 \
\hline 2002 & 6,300 & 123.0 & 131.7 \
\hline 2003 & 6,800 & 126.3 & 136.5 \
\hline
\end{array}$$ Based on Table 7.2,the real GDP for 2003 was
A)$8,588.4 billion.
B)$4,981.7 billion.
C)$9,282.0 billion.
D)$5,384.0 billion.

Question

Table 7.2 GDP for Newland
$$\begin{array} { | l | r | c | r | } 
\hline & \begin{array} { c } 
\text { Nominal GDP(in billions of } \
\text { dollars) }
\end{array} & \text { GDP deflator } & \multicolumn{2}{|c|} { \text { CPI } } \
\hline 2001 & \$ 5,900 & 120.1 & 128.3 \
\hline 2002 & 6,300 & 123.0 & 131.7 \
\hline 2003 & 6,800 & 126.3 & 136.5 \
\hline
\end{array}$$ Based on Table 7.2,the real GDP for 2003 was
A)$8,588.4 billion.
B)$4,981.7 billion.
C)$9,282.0 billion.
D)$5,384.0 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 calculation is $\frac{6,800}{126.3} \times 100 = 5,384.0$ billion dollars.

Table 72 GDP for Newland Based on Table 7