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GDP: Gross domestic product or what is commonly known as GDP is the measurement of the final value of all the goods and services that are produced within the domestic territory of a country given a specified time period. The GDP is measured in real and nominal terms, amongst which the real GDP is considered a better tool to measure the economic growth in an economy.
Nominal GDP: The entire market value of all products and services generated in a country's economy during a certain period is referred to as nominal GDP.
Real GDP: The real GDP is the measurement of the GDP value after adjusting for Inflation, i.e the value of real GDP is calculated by subtracting the value of inflation from the total value of output.
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- In 1950 GDP in the United Kingdom (measured in year 2005 pounds) was £317 billion. In 2000 it was £1,108 billion. Calculate the growth rate of real GDP in the United Kingdom over this period. Now suppose that the United Kingdom grows at the same rate for the 50 years following 2000. What will the UK real GDP be in the year 2050?arrow_forwardUse the concept of real and nominal GDP to compare the years 1980 (Nominal GDP was $2.863 Trillion) and 2017 (Nominal GDP was $19.49 Trillion). 1980 Consumer Price Index was 82.14 and 2017 Consumer Price Index was 246.6. The base year is 1982 - 1984 when the CPI would have been 100.arrow_forwardWhat is the GDP of this economy?arrow_forward
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