How much would Israel’s nominal GDP growth be next year if it experienced real GDP growth next year the same as its average over the past 50 years, with an inflation rate of 3% and population growth of 1%?

Please find part of questiom attached

6.25%

Explanation:

If inflation rate is 3%

And real GDP growth rate is 3.25 from question attachment

Nominal GDP growth rate which adds up inflation and output

=real GDP rate +inflation rate +population growth

=3.25%+3%

=6.25%

Therefore nominal GDP growth rate is 6.25%

This is because nominal GDP adds up the monetary value of all goods for the current year at current prices of all output and does not remove inflation like real GDP does. Also Population of 1% is already used in calculating real GDP so no need to add it nominal GDP calculation here

the answer is d

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