The table below shows nominal GDP (in billions of dollars) and the GDP deflator for the country of Chucknorristan over several decades.
\begin{tabular}{lll}
Year & Nominal GDP (billions) & GDP deflator \
\hline 1970 & $\$ 20$ & 50 \
1980 & $\$ 32$ & 80 \
1990 & $\$ 45$ & 100 \
2000 & $\$ 80$ & 160 \
2010 & $\$ 120$ & 250
\end{tabular}

What was real GDP in Chucknorristan in 1980?

Choose 1 answer:
(A) $\$ 32$ billion
(B) $\$ 40$ billion
(C) $\$ 80$ billion
(D) $\$ 400$ million
(E) $\$ 2.5$ billion

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Question

The table below shows nominal GDP (in billions of dollars) and the GDP deflator for the country of Chucknorristan over several decades.
\begin{tabular}{lll} 
Year & Nominal GDP (billions) & GDP deflator \
\hline 1970 & $\$ 20$ & 50 \
1980 & $\$ 32$ & 80 \
1990 & $\$ 45$ & 100 \
2000 & $\$ 80$ & 160 \
2010 & $\$ 120$ & 250
\end{tabular}

What was real GDP in Chucknorristan in 1980?

Choose 1 answer:
(A) $\$ 32$ billion
(B) $\$ 40$ billion
(C) $\$ 80$ billion
(D) $\$ 400$ million
(E) $\$ 2.5$ billion

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Accepted Answer

***B*** ∻Key Concept∻ ⚹Real GDP Calculation⚹ ∻Explanation∻ ⚹Real GDP is calculated by dividing the nominal GDP by the GDP deflator (expressed as a ratio to 100) for that year. For Chucknorristan in 1980, real GDP = Nominal GDP / (GDP deflator / 100) = $32 billion / (80 / 100) = $32 billion / 0.8 = $40 billion.⚹◊What is the formula to calculate real GDP using the GDP deflator?⍭ Generate me a similar question◊$

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