Thank you for visiting If nominal output is 4 4 trillion and the GDP deflator is 110 then real output is A 4 84 trillion B 4 4 trillion. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
Final answer:
The value of real output can be found by dividing the nominal output by the GDP deflator and multiplying by 100. Given a nominal output of $4.4 trillion and a GDP deflator of 110, the real output is $4 trillion.
Explanation:
The question requires the calculation of real output given the nominal output and GDP deflator. The Gross Domestic Product (GDP) of a country measures the total value of all goods and services produced within a specific period of time, expressed in dollars. Nominal output (or nominal GDP) is not adjusted for inflation, while the real output (or real GDP) is adjusted for inflation, giving a more accurate portrayal of an economy's growth.
The GDP deflator is an economic measure used to convert output measured at current prices (nominal GDP) into constant prices (real GDP). It’s calculated by dividing nominal GDP by real GDP and multiplying by 100, serving as an indicator of the overall level of price inflation in the economy.
Given the nominal output ($4.4 trillion) and the GDP deflator (110), the formula to solve for real GDP is:
Real GDP = Nominal GDP / (GDP Deflator / 100)
Insert the given values:
Real GDP = $4.4 Trillion / (110 / 100)
This implies that the real output is D. $4 Trillion.
Learn more about Real GDP Calculation here:
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