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Question

If the Nominal Gross Domestic Product =Rs4,400 and the Price Index (base=100)=110, calculate the Real Gross Domestic Product.

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Solution

We know,
Real GDP= Nominal GDPPrice Index of current Year×100
Real GOP= Nominal GOP Price Index of Current Year ×100200= Nominal GDP 11
Substituting the given Values in the formula
Real GDP=4,400100×100
or, Real GDP=4,000.

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