Index numbers

Question 1

Index number calculation

Answer 1

= (data value in year y/ base year value)*100

Question 2

what does nominal GDP measure:

Answer 2

the value of national output at current prices with no adjustment for inflation

Question 3

what does real GDP measure:

Answer 3

the volume of output adjusted for inflation and measured at constant prices

Question 4

real GDP in year t =

Answer 4

(nominal GDP in year t x100)/ price index in year t

100= price index in base year