Using the table below answer the following questions:Calculate the total value of goods and services at current prices in this economy eachyear? Calculate the total value of goods and services at constant prices in this economy eachyear? (Note: GDP deflator for 2015 is 100)What is the growth rate of Real GDP between 2016 and 2017? What was the growth rate of Nominal GDP between 2016 and 2017? Was the growth rate of real GDP higher or lower that the growth rate of nominalGDP? Explain. Using 2015 as the base year, calculate the CPI for each year. Calculate the inflation rate for 2015, 2016 and 2017. Given the following on a closed economy.C = 40 + 0.8Yd C= consumptionI = 55 – 200r I= InvestmentG = 20 G = government spendingT = 20 T = TaxesYe = 400 Ye = National Incomer = rate of interestDetermine the following: 3 marks eachThe equilibrium level of consumptionThe level of investmentThe level of interest rateThe level of Private savingsThe level of Public savingsThe level of national savingsYearPrice of T-ShirtQuantity of T-ShirtPrice of PajamasQuantity of Pajamas201510120122002016123001520020171427518180

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Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter15: Measuring A Nation's Income

Section: Chapter Questions

Problem 7PA

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Using the table below answer the following questions:

Calculate the total value of goods and services at current prices in this economy each
year?
Calculate the total value of goods and services at constant prices in this economy each
year? (Note: GDP deflator for 2015 is 100)
What is the growth rate of Real GDP between 2016 and 2017?
What was the growth rate of Nominal GDP between 2016 and 2017?
Was the growth rate of real GDP higher or lower that the growth rate of nominal
GDP? Explain.
Using 2015 as the base year, calculate the CPI for each year.
Calculate the inflation rate for 2015, 2016 and 2017.
Given the following on a closed economy.
C = 40 + 0.8Yd C= consumption
I = 55 – 200r I= Investment
G = 20 G = government spending
T = 20 T = Taxes
Ye = 400 Ye = National Income
r = rate of interest

Determine the following: 3 marks each
The equilibrium level of consumption
The level of investment
The level of interest rate
The level of Private savings
The level of Public savings
The level of national savings

Year	Price of T-Shirt	Quantity of T-Shirt	Price of Pajamas	Quantity of Pajamas
2015	10	120	12	200
2016	12	300	15	200
2017	14	275	18	180

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