NISM Certifications · NISM-Series-XV: Research Analyst · Economic Analysis
Nominal GDP of an economy grew from ₹200 lakh crore to ₹231 lakh crore in a year, while the GDP deflator rose from 100 to 110. What is the approximate real GDP growth rate?
Real GDP growth is about 5 percent. Deflating current nominal GDP of 231 by 1.10 gives real GDP of 210, against 200 in the base year, so growth is 10 over 200. The 15.5 percent figure is nominal growth that includes price increases.
- A15.5%
- B10.0%
- C5.0%Correct
- D5.5%
Explanation
Base-year real GDP = 200/1.00 = 200. Current real GDP = 231/1.10 = 210. Growth = 10/200 = 5%. Using nominal growth of 15.5% ignores inflation; 10% is just the deflator change.
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