Consider the following data for an economy. Year | Nominal GDP | Price Index --- | --- | --- 1 | $100 | 48 2 | 112 | 50 3 | 113 | 55 4 | 131 | 63 5 | 140 | 62 The economy's real GDP declined between years ___. 2 and 3 3 and 4 1 and 2 4 and 5
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The formula for real GDP is (Nominal GDP / Price Index) * 100. For year 2, the real GDP is ($112 / 50) * 100 = $224. For year 3, the real GDP is ($113 / 55) * 100 = $205.45. Show more…
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