Question

. If the aggregate price index is equal 1.10; the index of GDP
growth is 1.06; then the rate of real GDP growth is
approximately: ???percent

Answer 1

Answer:

rate in GDP

Now we’re in a position to answer the question that we posed previously: given nominal GDP for the U.S. economy from 1960-2010, how much did real GDP actually increase?

In order to see how much production has actually increased, we need to extract the effects of higher prices on nominal GDP, so that what we’re left with is real GDP, the increase in the quantity of goods and services produced. This can be easily done using a concept known as the GDP deflator. The GDP deflator is a price index measuring the average price of all goods and services included in the economy. We will explore price indices in detail and how they are computed when we learn more about inflation, bu