When calculating real GDP we must use the GDP deflator for that year. This allows us to adjust figures measured in curre
Posted: Thu May 19, 2022 9:04 am
When calculating real GDP we must use
the GDP deflator for that year. This allows us
to adjust figures measured in current prices for the rate of
inflation, and show the GDP in terms of the price at a base year.
Assuming that GDP in current prices grows from £120 billion in year
1 to £160 billion in year 2 and that the GDP deflator rises from
100 in year 1 to 130 in year 2, by how much has real GDP grown? ( 5
marks)
the GDP deflator for that year. This allows us
to adjust figures measured in current prices for the rate of
inflation, and show the GDP in terms of the price at a base year.
Assuming that GDP in current prices grows from £120 billion in year
1 to £160 billion in year 2 and that the GDP deflator rises from
100 in year 1 to 130 in year 2, by how much has real GDP grown? ( 5
marks)