Consider an economy that produces Camembert and wine
Prices and production of Camembert
2010 2011 2012
Price $10 $14 $18
Quantity 20,000 20,500 21,000
Prices and production of wine
2010 2011 2012
Price $50 $52.5 $55
Quantity 3,000 4,000 6,000
For the calculations involving the fixed-weight and variable-weight indexes use 2010 as the base year.
a.) Compute nominal GDP for each year
b.) Compute the Fixed Weight Price Index for each year.
c.) Compute the Variable Weight Price Index for each year.
d.) Compute the rates of inflation in 2011 and 2012 using the fixed weight price index and the variable weight price index.
e.) Compute real GDP in 2010, 2011 and 2012 by deflating nominal GDP's in the above three years using the fixed weight price index and the variable weight price index.
f.) Compute real GDP growth rates in 2011 and 2012 using the fixed weight price index and the variable weight price index.
Consider an economy that produces Camembert and wine
Prices and production of Camembert
2010 2011 2012
Price $10 $14 $18
Quantity 20,000 20,500 21,000
Prices and production of wine
2010 2011 2012
Price $50 $52.5 $55
Quantity 3,000 4,000 6,000
For the calculations involving the fixed-weight and variable-weight indexes use 2010 as the base year.
a.) Compute nominal GDP for each year
b.) Compute the Fixed Weight Price Index for each year.
c.) Compute the Variable Weight Price Index for each year.
d.) Compute the rates of inflation in 2011 and 2012 using the fixed weight price index and the variable weight price index.
e.) Compute real GDP in 2010, 2011 and 2012 by deflating nominal GDP's in the above three years using the fixed weight price index and the variable weight price index.
f.) Compute real GDP growth rates in 2011 and 2012 using the fixed weight price index and the variable weight price index.
