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Assume a nation's Nominal GDP is 15 Trillion with an inflation rate of 35%. Find its Real GDP. A. 11.1 Trillion B. 14.9 Trillion C. 13.8 Trillion

Assume a nation's Nominal GDP is 15 Trillion with an inflation rate of 35%. Find its Real GDP. A. 11.1 Trillion B. 14.9 Trillion C. 13.8 Trillion
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Assume a nation's Nominal GDP is 15 Trillion with an inflation rate of 35%. Find its Real GDP.

A. 11.1 Trillion
B. 14.9 Trillion
C. 13.8 Trillion

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User SingleWave Games
by
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1 Answer

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The formula for the relationship between real and nominal GDP is:
Real GDP = Nominal GDP / Deflator
Real GDP = 15 trillion / (1 + 0.35)
Real GDP = 11.1 trillion

The answer is A.
answered
User Himanshu Bhandari
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7.8k points
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