Suppose 2009 is the base year. from 2009 to 2010, the price index increases from 100 to 102.5. if nominal gross domestic product (gdp) is $2,800 in 2010, then the real gross domestic product (gdp) in 2010 is
We know that the price index has increased from 100 to 102.5 . Then we have that the GDP deflator is 102.5 . Then the real gross domestic product is equal to the nominal gross domestic product divided by the GDP deflator. Then we have that the real gross domestic product is equal to $2,800 / 102.5 = 27.317
