Calculate nominal GDP and real GDP for 2010, 2011 and 2012. (You would have to calculate GDP deflator also)
2010 2011 2012
Price Quantity Price Quantity Price Quantity
Orange 2 500 4 600 5 800
Bacon 4 400 6 500 6 700
Drinks 1 600 1.5 850 1.9 990
Calculate nominal GDP and real GDP for 2010, 2011 and 2012. (You would have to calculate GDP deflator also)
2010 2011 2012
Price Quantity Price Quantity Price Quantity
Orange 2 500 4 600 5 800
Bacon 4 400 6 500 6 700
Drinks 1 600 1.5 850 1.9 990
Related textbook solutions
Related questions
Real versus nominal GDP
Consider a simple economy that produces two goods: cupcakes and erasers. The following table shows the prices and quantities of the goods over a three-year period.
|
Year |
Cupcakes |
Erasers |
||
|---|---|---|---|---|
|
Price |
Quantity |
Price |
Quantity |
|
|
(Dollars per cupcake) |
(Number of cupcakes) |
(Dollars per eraser) |
(Number of erasers) |
|
| 2010 | 2 | 125 | 3 | 155 |
| 2011 | 4 | 135 | 3 | 210 |
| 2012 | 2 | 125 | 3 | 165 |
1. Use the information from the previous table to fill in the following table.
|
Year |
Nominal GDP |
Real GDP |
|---|---|---|
|
(Dollars) |
(Base year 2010, dollars) |
|
| 2010 | ||
| 2011 | ||
| 2012 |
2. From 2011 to 2012, nominal GDP (increased/decreased) , and real GDP (increased/decreased) .
3. Why is real GDP a more accurate measure of an economy's production than nominal GDP?
a. Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.
b. Real GDP is not influenced by price changes, but nominal GDP is.
c. Real GDP does not include the value of intermediate goods and services, but nominal GDP does.
The following table shows some data for an economy that produces only two goods: milk and honey.
| Year | Milk | Honey | ||
| Price | Quantity | Price | Quantity | |
| ($) | (Quarts) | ($) | (Quarts) | |
| 2016 | 1 | 200 | 2 | 100 |
| 2017 | 1 | 400 | 2 | 200 |
| 2018 | 2 | 400 | 4 | 200 |
The following table shows the Nominal GDP, Real GDP, and GDP Deflator for each year listed.
| Year | Nominal GDP | Real GDP | GDP Deflator |
| ($) | ($) | ||
| 2016 | 400 | 400 | 100 |
| 2017 | 800 | 800 | 100 |
| 2018 | 1600 | 800 | 200 |
Compute the % change in the Nominal GDP, Real GDP, and the GDP Deflator in 2017 and 2018 from the preceding year.
| Year | % Change in | ||
| Nominal GDP | Real GDP | GDP Deflator | |
| 2017 | |||
| 2018 | |||
From 2016 to 2017, _______ did not change; and from 2017 to 2018, ________ did not change.
Comparing the changes in 2017 and 2018, economic well-being increased more in _________
