EC 201 Study Guide - Final Guide: Gdp Deflator, List Of Major League Baseball Career Total Bases Leaders
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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 | Ā | Ā | Ā |
Year 2 | Ā | Ā | Ā |
Year 3 | Ā | Ā | Ā |
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. ______%
Real versus nominal GDP
Consider a simple economy that produces two goods: apples and oranges. The following table shows the prices and quantities for the goods over a three-year period.
Year |
Apples Ā |
Oranges Ā |
||
---|---|---|---|---|
Price | Quantity | Price | Quantity | |
(Dollars per apple) | (Number of apples) | (Dollars per orange) | (Number of oranges) | |
2010 | 1 | 120 | 1 | 195 |
2011 | 2 | 130 | 4 | 195 |
2012 | 4 | 130 | 4 | 145 |
A. Use the information from the previous table to fill in the following table.
Year | Nominal GDP | Real GDP | GDP Deflator |
---|---|---|---|
(Dollars) | (Base year 2010, Dollars) | ||
2010 | Ā | Ā | Ā |
2011 | Ā | Ā | Ā |
2012 | Ā | Ā | Ā |
Ā
B. From 2011 to 2012, change in nominal GDP is __________, and real GDP is ________.
Ā
C. The inflation rate in 2012 was ____________.
Ā
D. Why is real GDP a more accurate measure of an economy's production than nominal GDP?
a. Real GDP does not include the value of intermediate goods and services, but nominal GDP does.
b. Real GDP includes the value of exports, but nominal GDP does not.
c. Real GDP is not influenced by price changes, but nominal GDP is.
ch. 10
11. Problems and Applications Q5
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 ____________