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An analyst needs to adjust the nominal GDP for the years 2000 and 2010 into real terms to conclude his comparison analysis. The nominal GDP in 2000 was $672 billion and $1,690 billion for 2010; the real interest rate was 6.79% in 2000 and 3.71% in 2010; the 2000 deflator was 24 and 51 in 2010. What is the real gain? Group of answer choices
An analyst needs to adjust the nominal GDP for the years 2000 and 2010 into real terms to conclude his comparison analysis. The nominal GDP in 2000 was $672 billion and $1,690 billion for 2010; the real interest rate was 6.79% in 2000 and 3.71% in 2010; the 2000 deflator was 24 and 51 in 2010. What is the real gain? Group of answer choicesa) 18.34%
b) 38.58%
c) 151.48%
d) 70.61%
Answer:a) 18.34%Explanation:Real gain = [Real GDP year 2010]/[Real GDP year 2000]= [nominal GDP ]/[nominal GDP]Real GDP gain(2000) = [nominal GDP ]/[nominal GDP]= $672billion/24= 28Real GDP gain(2010) = [nominal GDP ]/[nominal GDP]= $1,690 billion/51= 33.14Real gain = Real GDP gain(2010)/Real GDP gain(2000) - 1= 33.14/28 - 1= 0.1834Therefore, The real gain is 18.34%...
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