Question

Given a GDP inflator of 120 and a Nominal GDP of 7.8 billion dollars, calculate Real GDP.(1 point)
Responses

6.6 billion dollars
6.6 billion dollars

9.36 billion dollars
9.36 billion dollars

9 billion dollars
9 billion dollars

6.5 billion dollars

Answer 1

To calculate the Real GDP using the nominal GDP and the GDP deflator, you can use the following formula:

\[
\text{Real GDP} = \frac{\text{Nominal GDP}}{\text{GDP Deflator}} \times 100
\]

Given:
- Nominal GDP = 7.8 billion dollars
- GDP Deflator = 120

Now, plug the values into the formula:

\[
\text{Real GDP} = \frac{7.8 \text{ billion}}{120} \times 100
\]

Calculating that:

\[
\text{Real GDP} = \frac{7.8}{120} \times 100 = 6.5 \text{ billion dollars}
\]

Therefore, the correct answer is:

**6.5 billion dollars**