(a) Suppose the information in the following table is for a simple economy that producesonly four goods and services: shoes, hamburgers, shirts, and cotton. Assume that 70%of cotton is used in the production of shirts.20122022QuantityQuantity907550100ProductShoesHamburgersShirtsCottonPrice$50$2$30$0.8010010050800Price$60$2$25$0.602023Quantity10012065120(iii) Calculate the GDP deflator for 2022 and 2023.(iv) Calculate the economic growth rate for 2023.Price$65$2.25$25$0.70(i) Calculate the nominal GDP for 2022 and 2023.(ii) Calculate the real GDP for 2022 and 2023 (assume the base year is 2012).

Gross Domestic Product (GDP) measures the money value of all final goods and services produced in an…

only four goods and services: shoes, hamburgers, shirts, and cotton. Assume that 70% of cotton is used in the production of shirts. 2012 2022 Quantity 100 100 50 800 Product Shoes Hamburgers Shirts Cotton Quantity Price $50 $2 $30 $0.80 90 75 50 100 Price $60 $2 $25 $0.60 2023 Quantity 100 120 65 120 Price $65 $2.25 $25 $0.70 (i) Calculate the nominal GDP for 2022 and 2023. (ii) Calculate the real GDP for 2022 and 2023 (assume the base year is 2012). (iii) Calculate the GDP deflator for 2022 and 2023.

only four goods and services: shoes, hamburgers, shirts, and cotton. Assume that 70% of cotton is used in the production of shirts. 2012 2022 Quantity 100 100 50 800 Product Shoes Hamburgers Shirts Cotton Quantity Price $50 $2 $30 $0.80 90 75 50 100 Price $60 $2 $25 $0.60 2023 Quantity 100 120 65 120 Price $65 $2.25 $25 $0.70 (i) Calculate the nominal GDP for 2022 and 2023. (ii) Calculate the real GDP for 2022 and 2023 (assume the base year is 2012). (iii) Calculate the GDP deflator for 2022 and 2023.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The graph shows the aggregate demand curve in a representative economy. Suppose that there is increased confidence about the economy. Using the line drawing tool, show the effect on the aggregate demand curve, and label your new curve. Carefully follow the instructions above, and only draw the required objects. ept Question 2.19
3. In a small community, breakfast is the most important meal of the day. Therefore, the only two goods that this community produces are coffee and scones in the following amounts: Year 2020 2021 Quantity 60 cups 90 cups Coffee Price $1.25 $1.45 Quantity 45 units 65 units Scones Price $2.10 $3.95 a) Calculate the inflation rate for 2021 using the GDP deflator method (assume that 2020 is the base year for real GDP calculations). Show your work. b) Calculate the inflation rate for 2021 using the CPI method (assume that 2020 is the base year for CPI calculations). Additionally, assume that the consumption basket for both years contains only 10 cups of coffee and 40 scones. Show your work. c) Compare the results of both inflation calculations and explain why they are similar or different based on the two methods and on the specific data used in this example.
GDP Table Transfer payments Government purchases 32 160 Personal taxes 76 Corporate Income taxes Taxes on production and imports 56 30 Social secunity contributions 16 Undistributed corporate profits Proprietors income 38 50 Compensation of employees Personal consumption expenditures Consumption of fived capital 516 644 Rents 66 Exports 28 Corporate profits 140 nterest 64 Dividends 46 Imports Gross private domestic investment Net foreign factor income eamed Statistical discrepancy 34 126 20 70 Refer to the above data. PI is: Oa. $702. Ob. Sy28. Oe S758. od. Sy26.
Refer to the table below for a very simple economy producing three goods: movies, burgers and bikes. Steel bike frames are used for bike production and meat patties are used for making burgers. 2015 2020 Product Quantity Price Quantity Price Steel frames 10 $5000 20 $7500 Movies 30 $10 50 $15 Bikes 10 $10000 20 $15000 Meat patties 200 $1.50 300 $2.00 Burgers 200 $2.00 300 $3.00 What is the nominal GDP in 2020? What was the nominal GDP in 2015? What is the real GDP in 2020 using 2015 prices as base year prices? What is the real GDP growth rate between 2020 and 2015? Explain the three main types of unemployment and outline the policies that can be used to reduce each type of unemployment.
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5. Problems and Applications Q9 A farmer grows wheat and sells to a miller for $90. The miller turns the wheat into flour and sells the flour to a baker for $145. The baker turns the wheat into bread and sells the bread to consumers for $155. Consumers eat the bread. Assume that these transactions account for all economic activity in this economy. GDP in this economy is S Value added is defined as the value of a producer's output minus the value of the intermediate goods that the producer buys to make the output. Assuming there are no intermediate goods beyond those just described, complete the following table by calculating the value added for each of the three producers. Then enter the total value added in the final row. Producer Farmer Miller Baker Total Value Added True or False: The total value added for the three producers in this economy equals the economy's GDP. True (Dollars) False
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3. Table: Nominal GDP and GDP deflator in 2020 and 2021 Nominal GDP 11000 12150 Year 2020 2021 GDP deflator 105 108 a.(i) Calculate the percentage change in nominal GDP from 2020 to 2021 (ii) What is the purpose of the GDP deflator? b.(1)Calculate real GDP for 2020 & 2021 (ii) What is the percentage increase in real GDP from 2020 to 2021 (iii) Why is the percentage change in nominal GDP higher than real GDP?