ECON 4710 Chapter : Hw2Ans
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Answer key: (20 points, 5 points each part) Consider the country sweets whose economy produces only three items, cookies, cakes, and. The base year is arbitrarily chosen as 2004. . 50: find nominal gdp in the current year (2005) and in the base year. Nominal gdp base year = (400)(1) + (350)(8) + (100)(4) = 3,600. Nominal gdp current year = (800)(1. 5) + (300)(9) + (200)(4. 5) = 4,800. Percent increase since base year is (4. 800 3,600)/3,600 = 33. 3 : find real gdp in the current year (2005) and in the base year. Real gdp base year = (400)(1) + (350)(8) + (100)(4) = 3,600 (always the same as nominal. Gdp in the base year, so you really don"t have to do this calculation. ) Real gdp current year = (800)(1) + (300)(8) + (200)(4) = 4000. Percent change since base year is (4000 3,600)/3,600 = 11. 1 : find the gdp deflator for the current year (2005) and the base year.
