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    Measuring real GDP growth

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    If GDP increases in nominal terms from $600 billion in 1994 to $663 billion in 1996 and the price index (1992=100) rises from 120 to 130, how much real growth (in 1992 dollars) in GDP occurred between 1994 and 1996?

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    https://brainmass.com/economics/barriers-to-growth/measuring-real-gdp-growth-500620

    Solution Preview

    Given Data:
    Year Nominal GDP Price index
    1994 $600 Billion 120%
    1996 $663 Billion 130%

    Step by Step Computation:
    1.) Computation of the 1994 Real GDP:
    Real GDP1994 = 1994 Nominal GDP / 1994 Price Index
    Real GDP1994 = $600 B /(120%)
    Real GDP1994= $600 B / 120%
    Real GDP1994= $600 B / ...

    Solution Summary

    The solution shows the step-by-step computation of the real Gross Domestic Product (GDP) growth.

    $2.19