Question

The country of Economica's GDP deflator and nominal GDP in three different years are shown in the table. Year Nominal GDP GDP Deflator year 1 $25746 125 year 2 $37543 123 year 3 $10998 100 The base year, i.e. the base period, is Year 3. For years 1–3, please obtain the real GDP. Round your answers to the nearest dollar. What is the real GDP for year 1? real GDP: $ What is the real GDP for year 2? real GDP: $ What is the real GDP for year 3? real GDP: $

Answer 1

GDP deflator = (Nominal GDP / Real GDP) * 100

=> Real GDP = (Nominal GDP / GDP deflator) * 100

Year 1.

Real GDP = (Nominal GDP / GDP deflator) * 100

Real GDP = ($25746 / 125) * 100

Real GDP = $25967.

Real GDP in year 1 is $25967

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Year 2.

Real GDP = (Nominal GDP / GDP deflator) * 100

Real GDP = ($37543 / 123) * 100

Real GDP = $30523

Real GDP in year 2 is $30523

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Year 3.

Real GDP = (Nominal GDP / GDP deflator) * 100

Real GDP = ($10998 / 100) * 100

Real GDP = $10998.

Real GDP in year 3 is $10998