Consider the following data on U.S. GDP:

a. What was the growth rate of nominal GDP between 1994 and 2014? (Hint: The growth rate of a variable X over an N-year period is calculated as 100 3 [(Xfinal/Xinitial)1/N 2 1].)

b. What was the growth rate of the GDP deflator between 1994 and 2014?

c. What was real GDP in 1994 measured in 2009 prices?

d. What was real GDP in 2014 measured in 2009 prices?

e. What was the growth rate of real GDP between 1994 and 2014?

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

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Year 2014 1994 Nominal GDP (in billions of dollars) 17,419 7,309 GDP Deflator (base year 2009) 108.3 73.8