# Using the following data of an imaginary economy, calculate and compare the Real Gross Domestic Product (GDP) for the given years

Using the following data of an imaginary economy, calculate and compare the Real Gross Domestic Product (GDP) for the given years:

Year | 2015 – 16 | 2016 – 17 |

Nominal GDP Rate | 8.4% | 9% |

GDP Deflator | 140 | 125 |

Anurag Pathak Changed status to publish December 21, 2023

Solution:-

Calculation of Real GDP for 2015 – 16

Real GDP = Nominal GDP/GDP Deflator Ã— 100

Real GDP = 8.4/140 Ã— 100 = 6%

Calculation of Real GDP for 2016 – 17

Real GDP = Nominal GDP/GDP Deflator Ã— 100

Real GDP = 9/125 Ã— 100

Real GDP = 7.2%

The Real GDP increases in the year 2016 – 17 may be due to increase in production

Anurag Pathak Changed status to publish November 12, 2023