Question

If nominal GDP is $7 trillion and real GDP is $4 trillion, the price index is:
A) 57
B) 570
C) 17.5
D) 175

Answer 1

Answer:

Price index = 175

Explanation:

Given:

Nominal GDP = $7 trillion

Real GDP = $4 trillion

Find:

Price index

Computation:

After that, divide the nominal GDP by the actual GDP to get the price index.

Price index = [Nominal GDP / Real GDP]100

Price index = [$7 trillion / $4 trillion ]100

Price index = 175