Consider the following data on the U.S. economy:

Year Nominal GDP

(in billions of dollars)

GDP Deflator

(base year 2012)

2018 20,501 110.4 1998 9,063 75.3

a. What was the growth rate of nominal GDP between 1998 and 2018? (Hint: The growth rate of a variable X over an N-year period is calculated as X X N 100 3[( / ) 2 1]. final initial 1/ )

b. What was the growth rate of the GDP deflator between 1998 and 2018?

c. What was real GDP in 1998 measured in 2012 prices?

d. What was real GDP in 2018 measured in 2012 prices?

e. What was the growth rate of real GDP between 1998 and 2018?

f. Was the growth rate of nominal GDP higher or lower than the growth rate of real GDP? Explain.