The following table shows nominal GDP and an approximate price index for a group

Question

The following table shows nominal GDP and an approximate price index for a group of selected years. Compute real GDP. Indicate in each calculation whether you are inflating or deflating the nominal GDP data.

YEAR                   Nominal GDP(billions)                    Price index(2005=100)                    Real GPD(billions)
1968                    $       909.8                                              22.01
1978                           2293.8                                              40.40
1988                           5100.4                                              66.98
1998                           8793.5                                              85.15
2008                         14441.4                                             108.48

Explanation / Answer

YEAR Real GPD(billions 1968 4133. 1978 5677.7 inflating 1988 7614.8 inflating 1998 10327.06 inflating 2008 13312.5----deflating- IN YEAR 2008; Nominal GDP(billions > Real GPD(billions; HENCE IT IS Deflated

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