Q31 · Practice questionSimple familiar4 marks
QUESTION 31 (4 marks)
Use the data to calculate real GDP in each year and its percentage change. Explain why nominal growth gives a different impression.
WORKED SOLUTION
4 marksPractice marking scheme
Answer
Real GDP is $2000 billion in both years; real growth is 0%, while nominal growth is 10%.
Working
Real GDP = nominal GDP ÷ (deflator/100). Thus 2200/1.10 = 2000 and 2420/1.21 = 2000. Nominal GDP increases by 220/2200 × 100 = 10%. The increase reflects the price level rather than additional real output.
Marking criteria
- Correctly deflates both annual GDP values. [2 marks]
- Calculates zero real growth. [1 mark]
- Distinguishes the 10% nominal increase from unchanged real output. [1 mark]
Practice question aligned to the current QCAA syllabus; review the worked solution and marking criteria.
View the QCAA syllabusHow many marks did you earn?
Compare your working with the guide above.