The accompanying table shows data on nominal GDP in billions

The accompanying table shows data on nominal GDP (in billions of dollars), real GDP (in billions of 2005 dollars), and population (in thousands) of the United States in 1960? 1970, 1990, 2000, and 2010. The U.S. price level rose consistently over the period 1960 - 2010.

A.)  Why is real GDP greater than nominal GDP for all years until 2000 and lower for 2010?

B.) Calculate the percent change in real GDP from 1960 to 1970, 1970 to 1980, 1980 to 1990, 1990 to 200, and 2000 to 2010. Which period had the highest Growth rate?

C.) Calculate Real GDP per capita for each of the years in the table.

D.) Calculate the percent change in real GDP per capita from 1960 to 1970, 1970 to 1980, 1980 to 1990, 1990 to 2000, and 2000 to 2010. Which period had the Highest growth rate?

E.) How do the percent change in real GDP and the percent change in real GDP per capita compare? Which is larger? Do we expect them to have this relationship?

Year	Nominal GDP (billions of dollars)	Real GDP (billions of 2002 dollars)	Population (thousands)
1960	$39.8	$257.7	17 870
1970	90.2	420.4	21 297
1980	314.4	625.4	24 516
1990	679.9	825.3	27 691
2000	1076.6	1100.5	30 686
2010	1624.6	1325.0	34 126

Solution

A).Nominal is a measure in terms of current prices whereas Real is expressed in terms of some base year prices. Since the prices are increasing, the Real GDP of 2010 gets adjusted to the inflation and hence it is less.
B) 1970 had highest growth
C)

Year

Nominal GDP (billions of dollars)

Real GDP (billions of 2002 dollars)

percent change in real GDP

Population (thousands)

Real GDP per capita

percent change in real GDP per capita

1960

39.8

257.7

17870

0.0144

1970

90.2

420.4

63.14

21297

0.0197

36.88

1980

314.4

625.4

48.76

24516

0.0255

29.23

1990

679.90

825.3

31.96

27691

0.0298

16.83

2000

1076.60

1100.5

33.35

30686

0.0359

20.33

2010

1624.60

1325

20.4

34126

0.0388

8.26

D) 1970 had highest growth
E) Both of them are correlated and follow same pattern. Percent change in real GDP is larger and both of them have linear relationship

Year	Nominal GDP (billions of dollars)	Real GDP (billions of 2002 dollars)	percent change in real GDP	Population (thousands)	Real GDP per capita	percent change in real GDP per capita
1960	39.8	257.7		17870	0.0144
1970	90.2	420.4	63.14	21297	0.0197	36.88
1980	314.4	625.4	48.76	24516	0.0255	29.23
1990	679.90	825.3	31.96	27691	0.0298	16.83
2000	1076.60	1100.5	33.35	30686	0.0359	20.33
2010	1624.60	1325	20.4	34126	0.0388	8.26