Question:
If the Nominal GDP increased by 10% and the price level increased by 4%, the Real GDP growth rate is approximately:
(1) 14%
(2) 10%
(3) 6%
(4) 4%
(5) 2.5%
Correct Answer:
(3)
Answer Explanation:
Real GDP growth is approximately Nominal Growth minus Inflation. 10% – 4% = 6%. This adjusts the money value of GDP to show the actual increase in production volume.
Topic: National Income Year: 2024
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