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The GDP deflator was 30 and real interest was 6.23% in 1990. And the nominal GDP...

The GDP deflator was 30 and real interest was 6.23% in 1990. And the nominal GDP in the same year was $993. While in 2010, the GDP deflator was 74 and real interest rate was 3.21%. What would be the value of the nominal 1990 GDP in the 2010 dollars?

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Answer #1

Given information,

Nominal GDP in year 1990 is. $993

GDP deflator in year 1990 is 30

GDP deflator in year 2010 is 74

Value of nominal 1990 GDP in the 2010 dollars is

=( Nominal GDP in 1990/GDP deflator in 1990)* GDP deflator in 2010

= (993/30)*74

= $2449.4

Hence, the value of nominal 1990 GDP in the 2010 dollars is $2449.4

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