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Use the following information to answer this question. If nominal GDP rises from $100 trillion to $120 trillion, while the GD
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Answer #1

Answer is D.
Nominal GDP = Real GDP × GDP deflator
Real GDP = Nominal GDP × / GDP deflator.
- So when nominal GDP was 100 trillion and GDP deflator was 2 then =
Real GDP = 100/2 = 50
-When nominal GDP was 120 and deflator was 2.5 then -
Real GDP = 120/2.2 = 54.54
So percentage change in real GDP = 4.5 ×100/50 = 9%.

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