Use the following to answer questions .
Exhibit: Long-run Equilibrium
-(Exhibit: Long-run Equilibrium) 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

Use the following to answer questions .
Exhibit: Long-run Equilibrium 
-(Exhibit: Long-run Equilibrium) 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 Deflator. Therefore, Nominal GDP = $7,000 billion x 1.12 = $7,840 billion.

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