In year 1, the quantity produced is Q1 and the price is P1. In year 2, the quantity produced is Q1 and the price is P2. In year 3, thequantity produced is Q3 and the price is P3. Year 1 is the baseyear. Answer the following questions in terms of these variables,and be sure to simplify your answer if possible.
A. What is nominal GDP for each of these years?
B. What is real GDP for each of these years?
C. What is the GDP deflator for each of these years?
D. What is the percentage growth rate of real GDP from year 2 toyear 3?
E. What is the inflation rate as measured by the GDP deflator fromyear 2 or year 3?
In year 1, the quantity produced is Q1 and the price is P1. In year 2, the quantity produced is Q1 and the price is P2. In year 3, thequantity produced is Q3 and the price is P3. Year 1 is the baseyear. Answer the following questions in terms of these variables,and be sure to simplify your answer if possible.
A. What is nominal GDP for each of these years?
B. What is real GDP for each of these years?
C. What is the GDP deflator for each of these years?
D. What is the percentage growth rate of real GDP from year 2 toyear 3?
E. What is the inflation rate as measured by the GDP deflator fromyear 2 or year 3?
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Consider an economy that produces only chocolate bars. In year 1, the quantity produced is 3 bars and the price is $4. In year 2, the quantity produced is 4 bars and the price is $5. In year 3, the quantity produced is 5 bars and the price is $6.
Using year 1 as the base year, compute nominal GDP, real GDP, and the GDP deflator for each year.
| Year | Nominal GDP | Real GDP | GDP Deflator |
|---|---|---|---|
| (Dollars) | (Dollars) | ||
| Year 1 | |||
| Year 2 | |||
| Year 3 |
The percentage growth rate of real GDP from year 2 to year 3 is. ______%
The inflation rate as measured by the GDP deflator from year 2 to year 3 is. ______%
