TutorOn by Sanath Withanage

Question:

Suppose that last year’s Real Gross Domestic Product of a country was Rs. 12 000 billion, this year’s Nominal GDP is Rs. 16 500 billion, and the GDP Deflator for this year is 150. What is the growth rate of Real GDP of this country?
(1) 37.5%
(2) 9.5%
(3) -6.4%
(4) -8.3%
(5) -27.3%

Correct Answer:

(4)

Answer Explanation:

First, calculate this year’s Real GDP: (Nominal GDP / GDP Deflator) * 100 = (16,500 / 150) * 100 = 11,000 billion. The Real GDP growth rate is the percentage change from last year: ((11,000 – 12,000) / 12,000) * 100 = -8.33%.

Topic: National Income Year: 2023