# IF REAL GDP IS 55, AND THE GDP DEFLATOR IS 120,HOW WOULD YOU CALCULATE NOMINAL GDP IN THIS EXAMPLE?THE ANSWER IS 66.PLEASE SHOW HOW YOU WOULD GET…

## IF REAL GDP IS 55, AND THE GDP DEFLATOR IS 120,HOW WOULD YOU CALCULATE NOMINAL GDP IN THIS EXAMPLE?THE ANSWER IS 66.PLEASE SHOW HOW YOU WOULD GET…

## IF REAL GDP IS 55, AND THE GDP DEFLATOR IS 120,HOW WOULD YOU CALCULATE NOMINAL GDP IN THIS EXAMPLE?THE ANSWER IS 66.PLEASE SHOW HOW YOU WOULD GET…

All you have to do here is get the formula and then do algebra. Here’s how.The formula for this isDeflator = (nominal gdp/real gdp)*100Using the numbers from your example, we have120 =(nominal gdp/55)*100Now you just do algebra. We can divide both sides by 100.1.2 = nominal gdp/55So now we cross multiply andnominal gdp = 1.2*55Do the math there, andNominal GDP = 66 This makes sense because the nominal GDP should be higher than the real GDP if the deflator is more than 100. That’s because a deflator of more than 100 indicates inflation has happened since the base year.