ECON 1102 Study Guide - Final Guide: Potential Output, Opportunity Cost, Gdp Deflator

Ch. 10

step 2

a) What is the Nominal GDP for each year?

2010: $ 2100 2011: $ 2600 2012: $ 3100

b) What is Real GDP for each year using 2011 as the base year?

2010: $ 2410 2011: $2600 2012: $2700

c) What is the GDP deflator for each year?

2010: 87.136 2011:100 2012: 114.8

d) Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2010 and 2011 from the previous year.

NOMINAL: 2010 to 2011: %23.8 2011 to 2012: %19.23

REAL: 2010 to 2011: %7.88 2011 to 2012: %2.8

DEFLATOR: 2010 to 2011:% 14.7 2011 to 2012: % 14.8

this is my question :

e) Did economic well being rise more from 2010 to 2011 or from 2011 to 2012? Why?

A. A Chinese restaurant buys 100 cups of rice for a total of $10; they buy soy, fish and oyster sauces for a total of $20; they buy assorted vegetables for $40. They create 50 meals with these ingredients and sell each one for $5. How much does this process contribute to GDP? $70 $180 $250 $200 A country aims to double real GDP per capita in the next 10 years. This means that on average real GDP per capita must grow at ____ per year

1.  2%
2. 4%
3. 7%
4. 10%

B. A country aims to double real GDP per capita in the next 10 years. If the rate of population growth in the country is 1% per year then this means that real GDP must grow at ____ per year.

1. 5%
2. 8%
3. 11%
4. 3%

C. A country wants its real GDP per capita to grow at a rate of 2.5% per year. If the rate of population growth in the country is 1% per year and the inflation rate is 2% per year then this means that nominal GDP must grow at ____ per year.

1. 5.5%
2. 2.5%
3. 4.5%
4. 3.5%