1.

Use following information of an imaginary country :Year2014-20152015-20162016-2017Nominal GDP6.58.49GDP deflator100140125(i) For which year is Real GDP and Nominal GDP same and why ? (ii) Calculate Real GDP for the given years. Is there any year for which Real GDP falls ?

Answer»

(i) Real GDP and Nominal GDP is same for year 2014-2015. It is so because 2014- 20 15 is the base year. 

(ii)

Year2014-20152015-20162016-2017
Nominal GDP6.58.49
GDP deflator100140125
Real GDP = \(\frac{Normal\,GDP}{GDP de flator}\times100\)6.567.2

The Real GDP declined in the year 2015-2016. It could be due to high rate of inflation or price levels.



Discussion

No Comment Found

Related InterviewSolutions