Question

Question

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)
Responses

110
110

0.9
0.9

90.9
90.9

1.1
1.1

Answer 1

The GDP deflator is calculated using the 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:

\[ \text{GDP Deflator} = \left( \frac{5500}{5000} \right) \times 100 \]

\[ \text{GDP Deflator} = \left( 1.1 \right) \times 100 \]

\[ \text{GDP Deflator} = 110 \]

Therefore, the GDP deflator is 110.