Question

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

Answer 1

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