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Question : What is the nominal GDP if the real GDP is 500 and the price index is 150?

Option 1: 650

Option 2: 450

Option 3: 750

Option 4: 350


Team Careers360 4th Jan, 2024
Answer (1)
Team Careers360 12th Jan, 2024

Correct Answer: 750


Solution : The correct answer is 750 .

NGDP is the output of goods and services produced in a country, measured in current prices. RGDP adjusts for inflation or deflation, providing a measure of the economy's actual growth. The relationship between nominal GDP (NGDP), real GDP (RGDP), and the price index (PI) is given by the formula: NGDP = RGDP × (PI/100).

Given: RGDP = 500 and PI = 150; NGDP = 500 × (150/100); NGDP = 500 × 1.5 = 750. So, the nominal GDP is 750.

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