Question 21 If the Real Gross Domestic Product is Rs 200 and the Nominal Gross Domestic Product is Rs 210, Calculate the Price Index (Base = 100). - Economics

If the Real Gross Domestic Product is Rs 200 and the Nominal Gross Domestic Product is Rs 210, calculate the Price Index (base = 100).

Solution

We know,
$\text{ Real GDP }= \frac{\text{ Nominal GDP }}{\text{ Price Index of Current Year }} \times 100$
Substituting the given values in the formula
$200 = \frac{210}{\text{ Price Index of Current Year }} \times 100$
or, Price Index of Current Year = 105

Concept: Gross and Net Domestic Product (GDP and NDP)
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