00:01
So here we need to calculate real gdp.
00:02
We know that nominal gdp is going from 100 to 120.
00:07
And it's trillion, but that doesn't really matter.
00:11
But that's in different dollars, right? the gdp deflater is going from 2 to 2 .2.
00:22
So what is the gdp deflater? the gdp deflater is a measure of prices.
00:28
So what this is saying is that prices went up by 10 % throughout the economy.
00:38
So nominal gdp reflects the prices and the quantities.
00:43
We know that nominal gdp went up by 20%.
00:47
We know that prices went up by 10%.
00:50
So the implication is that real gdp went up by 10%.
00:57
So that's the intuitive way to end.
01:00
Answer this, right? you can see just from this that the answer is b.
01:05
All we need to do is think approximately.
01:09
If you want to do this more seriously, right? what you need to do is start off with 120...