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Homework answers / question archive / If real gross domestic product (GDP) grew by 4 percent and nominal GDP grew by 3 percent, then the inflation rate was a

If real gross domestic product (GDP) grew by 4 percent and nominal GDP grew by 3 percent, then the inflation rate was a

Economics

If real gross domestic product (GDP) grew by 4 percent and nominal GDP grew by 3 percent, then the inflation rate was a. 1 percent. d. 12 percent. b. -1 percent. e. 0 percent. c. 7 percent. 
 

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Answer

b .

Explanation

Computation of Inflation Rate:

Inflation Rate = Growth of Nominal GDP - Growth of Real GDP

= 3% - 4%

= -1%

So, the inflation rate is -1% The correct option is B "-1%".

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