Given a Real GDP of $5,000 and a Nominal GDP of $5,500 , calculate the GDP deflator. Round your answer to the nearest tenth if necessary.(1 point)

Question

Responses

1.1
1.1

90.9
90.9

0.9
0.9

110

Answer 1

The GDP deflator can be calculated using the following formula:

\[ \text{GDP Deflator} = \left( \frac{\text{Nominal GDP}}{\text{Real GDP}} \right) \times 100 \]

Given:

• Nominal GDP = $5,500
• Real GDP = $5,000

Substituting the values into the formula:

\[ \text{GDP Deflator} = \left( \frac{5,500}{5,000} \right) \times 100 \] \[ \text{GDP Deflator} = 1.1 \times 100 \] \[ \text{GDP Deflator} = 110 \]

Thus, the GDP deflator is 110.