\begin{tabular}{l} Question 14 \\ Assume that between 1998 and 2008, nominal GDP increased from \( \$ 7 \) trillion to \( \$ 12 \) trillion and that the price index rose from \\ 100 to 1333.3 . Which of the following expresses GDP for 2008 in terms of 1998 prices? \\ (1) \( \$ 9.0 \) trillion \\ (2) \( \$ 7.5 \) trillion \\ (3) \( \$ 16.0 \) trillion \\ (4) \( \$ 9.5 \) trillion \\ \hline\end{tabular}

To express GDP for 2008 in terms of 1998 prices, we can use the formula: \[ \text{Real GDP} = \frac{\text{Nominal GDP}}{\text{Price Index}} \times 100 \] Plugging in the values, we have: 1. Nominal GDP in 2008 = \( \$ 12 \) trillion 2. Price Index for 2008 = 133.3 (Note that 1333.3 implies we should divide by 10 to bring it down to a more standard price index format). Now calculating the real GDP: \[ \text{Real GDP 2008} = \frac{12 \text{ trillion}}{133.3} \times 100 \approx 9.0 \text{ trillion} \] So, the answer is (1) \( \$ 9.0 \) trillion.