Figure 7-2
-Refer to Figure 7-2. If the real GDP is $7,000 billion and the implicit price deflator is 1.12, what is the value of nominal GDP?
A) $6,250 billion
B) $7,840 billion
C) $9,000 billion
D) cannot be determined from the information given

Question

Figure 7-2 
-Refer to Figure 7-2. If the real GDP is $7,000 billion and the implicit price deflator is 1.12, what is the value of nominal GDP?
A) $6,250 billion 
B) $7,840 billion 
C) $9,000 billion 
D) cannot be determined from the information given

Quizplus · Accepted Answer

Nominal GDP = Real GDP x Price Level (implicit price deflator)
Nominal GDP = $7,000 billion x 1.12 = $7,840 billion. Therefore, the answer is B.

Figure 7-2 -Refer to Figure 7-2. If the Real GDP Is $7,000