The correct option is C. The real GDP is $250 billion. The real GDP is the GDP measurement that accounts for inflation. As a result, the definition of GDP is as follows: GDP = Consumption + Investment + Government Spending + Net Exports, or, to put it another way, GDP = C + I + G + NX. Where consumption (C) denotes household and nonprofit organization private consumption expenditures, investment (I) denotes business expenditures.
The GDP deflator calculates the change in domestic production that results from alterations in economic pricing rates. As a result, it assesses the change in nominal and real GDP over a given year, which is computed by dividing nominal and real GDP and multiplying the result by 100.
Given,
Nominal GDP =$300 billion
GDP Deflator =120
Real GDP =?
Required to calculate Real GDP = Nominal GDP divides by GDP deflator multiplied by 100.
Real GDP = $300 x 100/120 = $250 billion
Thus, the Real GDP is $250 billion.
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