If in some year real GDP was 25 billion and the GDP deflator

If in some year real GDP was $25 billion and the GDP deflator was 68, what was nominal GDP?

$2.72 billion.

$17 billion.

$36.8 billion.

$43 billion.

Solution

In this question real GDP is 25 billion.

GDP deflator is 68.

The formula for nominal GDP = Deflator * real GDP / 100

Nominal GDP = 68*25/100 = 17 billion

Hence the correct answer is 17 billion. (Option B)