Thread: Non verbal resoning question

UK GDP
Year GDP/$m $ exchange Inflation index(2000=100)
1980 230,695 £0.42 43
1985 354,952 £0.77 60
1990 557,300 £0.56 76
1995 718,383 £0.63 92
2000 953,576 £0.65 100
2005 1,209,334 £0.54 107

Question:
What was the increase in GDP/million from 1980 to 2005 in real terms?


Can anyone please explain to me how the answer is $593,719?


Thanks in advance
Calypso

Originally Posted by calypso

UK GDP
Year GDP/$m $ exchange Inflation index(2000=100)
1980 230,695 £0.42 43
1985 354,952 £0.77 60
1990 557,300 £0.56 76
1995 718,383 £0.63 92
2000 953,576 £0.65 100
2005 1,209,334 £0.54 107

Question:
What was the increase in GDP/million from 1980 to 2005 in real terms?


Can anyone please explain to me how the answer is $593,719?


Thanks in advance
Calypso

What does "in real terms" mean. In year 2000 dollars I could tell you, and that has the value quoted.

If ind is the inflation index with respect to year 2000 and the in year value is xx dollars, the value in year 2000 dollars is yy=xx/ind.

CB