ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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### Problem 10: Analysis of Real GDP and GDP Deflator using Given Data

#### Instruction:
Refer to the tables provided for part **A** and **B** respectively, to solve the questions below.

---

### Part A

Given that the base year is 2017:
**Question:** In 2018, the country’s real GDP was
  
#### Prices and Quantities Table

| Year | Price of Cereal | Quantity of Cereal | Price of Milk | Quantity of Milk |
|------|-----------------|--------------------|---------------|------------------|
| 2015 | $4.00           | 100                | $1.50         | 180              |
| 2016 | $4.00           | 120                | $2.00         | 200              |
| 2017 | $5.00           | 150                | $2.50         | 200              |
| 2018 | $6.00           | 180                | $3.50         | 240              |

**Multiple Choice Answers:**
- $1800
- $1500
- $1920
- $1480

---

### Part B

Given that the base year is 2017:
**Question:** In 2018, the country’s GDP deflator was

#### Prices and Quantities Table

| Year | Price of Cereal | Quantity of Cereal | Price of Milk | Quantity of Milk |
|------|-----------------|--------------------|---------------|------------------|
| 2015 | $4.00           | 100                | $1.50         | 180              |
| 2016 | $4.00           | 120                | $2.00         | 200              |
| 2017 | $5.00           | 150                | $2.50         | 200              |
| 2018 | $6.00           | 180                | $3.50         | 240              |

**Multiple Choice Answers:**
- 128.0
- 95.6
- 112.8
- 153.6

To solve the questions, use the given tables, base year information, and the formulas for real GDP and GDP deflator:

#### Calculations:
1. **Real GDP (2018) using 2017 prices:**
   \[
   \text{Real GDP}_{2018} =
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Transcribed Image Text:### Problem 10: Analysis of Real GDP and GDP Deflator using Given Data #### Instruction: Refer to the tables provided for part **A** and **B** respectively, to solve the questions below. --- ### Part A Given that the base year is 2017: **Question:** In 2018, the country’s real GDP was #### Prices and Quantities Table | Year | Price of Cereal | Quantity of Cereal | Price of Milk | Quantity of Milk | |------|-----------------|--------------------|---------------|------------------| | 2015 | $4.00 | 100 | $1.50 | 180 | | 2016 | $4.00 | 120 | $2.00 | 200 | | 2017 | $5.00 | 150 | $2.50 | 200 | | 2018 | $6.00 | 180 | $3.50 | 240 | **Multiple Choice Answers:** - $1800 - $1500 - $1920 - $1480 --- ### Part B Given that the base year is 2017: **Question:** In 2018, the country’s GDP deflator was #### Prices and Quantities Table | Year | Price of Cereal | Quantity of Cereal | Price of Milk | Quantity of Milk | |------|-----------------|--------------------|---------------|------------------| | 2015 | $4.00 | 100 | $1.50 | 180 | | 2016 | $4.00 | 120 | $2.00 | 200 | | 2017 | $5.00 | 150 | $2.50 | 200 | | 2018 | $6.00 | 180 | $3.50 | 240 | **Multiple Choice Answers:** - 128.0 - 95.6 - 112.8 - 153.6 To solve the questions, use the given tables, base year information, and the formulas for real GDP and GDP deflator: #### Calculations: 1. **Real GDP (2018) using 2017 prices:** \[ \text{Real GDP}_{2018} =
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