The nominal GDP and the Consumer Price Index (CPI) for the country of Stewarton in 2017 were $15 trillion and 125, respectively. In 2012, the CPI for Stewarton was 120. Therefore, the real GDP of Stewarton in 2012 dollars is _____ trillion.
A) $16.2
B) $15.2
C) $14.4
D) $14.2

Question

Quizplus · Accepted Answer

To calculate the real GDP in 2012 dollars, use the formula: Real GDP = Nominal GDP / (CPI in current year / CPI in base year). Here, Real GDP = $15 trillion / (125 / 120) = $14.4 trillion.

The Nominal GDP and the Consumer Price Index (CPI) for the Country