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If the real GDP is greater than the nominal GDP,

A. GDP chain price index is more than 100.

B. GDP chain price index is less than 100.

C. GDP deflator is more than 100.

D. Only A and B.

E. Only A and C.

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Anne Gillian Duero
Anne Gillian DueroLv10
28 Sep 2019

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Related questions

Which of the following statements is true?

A. Real GDP equals nominal GDP divided by the GDP deflator, and then times 100.

B. The inclusion of intermediate goods and services in GDP calculations would over-estimate a nation's production level.

C. Disposable personal income equals personal income plus personal taxes.

D. Only A and B.

E. Only B and C.

Ch. 10

STEP: 2 of 2
The following table shows some data for an economy that produces only two goods: milk and honey.
Year
Milk
Honey
Price
Quantity
Price
Quantity
(Dollars)
(Quarts)
(Dollars)
(Quarts)
2013 1 100 2 50
2014 1 200 2 100
2015 2 200 4 100
The following table shows nominal GDP, real GDP, and the GDP deflator for each year listed.
Year
Nominal GDP
Real GDP
GDP Deflator
(Dollars)
(Dollars)
2013 200 200 100
2014 400 400 100
2015 800 400 200
Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2014 and 2015 from the preceding year.
Year
Percentage Change In...
Nominal GDP
Real GDP
GDP Deflator
2014
2015
From 2013 to 2014, did not change; and from 2014 to 2015, did not change.
True or False: Economic well-being rose more in 2014 than in 2015.
True
False

step 2

1. Assume that nominal GDP for 2012 was $700B with a price index of 110 (using 2004 as the base year). What is the real GDP for 2012?

Remember: To compute the real GDP for any given year using this formula: Real GDP = Nominal GDP/Price Index x 100

2. Assume that nominal GDP for 2013 was $850B with a price index of 140 (using 2004 as the base year). What is the Real GDP for 2013?

Remember the formula: Real GDP = Nominal GDP/Price Index x 100

3. Did real GDP increase or decrease from 2012 to 2013? If it decreased, explain why? Compare your answers from questions (1) and (2) above and answer question (3).

4. Why do economists use real GDP, rather than nominal GDP, to measure economic growth?

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