Question

If the Real GDP is Rs 520 and Nominal GDP is Rs 650, Price Index (base=100) is equal to .

• A. 150
• B. 135
• C. 125
• D. 80

Answer 1

The correct option is C 125

Real GDP = Nominal GDP $\times \frac{100}{\mathrm{Price}\mathrm{Index}}$

Or, Price Index = $\frac{\mathrm{Nominal}\mathrm{GDP}}{\mathrm{Real}\mathrm{GDP}}\times 100$
= $\frac{650}{520}\times 100$
= 125

Price Index = 125