Given a GDP deflator of 120 and a Nominal GDP of 7.8 billion dollars, calculate Real GDP.
a
6.6 billion dollars
b
9 billion dollars
c
6.5 billion dollars
d
9.36 billion dollars
Real GDP = (Nominal GDP / GDP Deflator) * 100
Real GDP = (7.8 billion / 120) * 100
Real GDP = 6.5 billion dollars
Therefore, the answer is (c) 6.5 billion dollars.
To calculate Real GDP, you need to divide the Nominal GDP by the GDP deflator and then multiply by 100.
Real GDP = (Nominal GDP / GDP Deflator) * 100
Plugging in the given values, we have:
Real GDP = (7.8 billion dollars / 120) * 100
Simplifying the equation, we get:
Real GDP = 6.5 billion dollars
Therefore, the correct answer is c) 6.5 billion dollars.