Reference equation: Real GDP per capita growth rate = Nominal GDP per capita growth rate – Inflation rate – Population growth rate - - This equation is an approximation of the exact rate of growth of GDP per capita, and so it results in some errors when calculating this rate. However, the simplified equation both is easy to use and results in small error terms when inflation, nominal GDP growth, and population growth are low, and so it is a useful approximation. The table below lists a fictional country's nominal GDP, real GDP, GDP deflator, and population over two years. Year 2017 2018 Nominal GDP $1,100,000 GDP Deflator 100 105 Real GDP (2017 dollars) $1,100,000 $1,142,857 Population 1,000 1,005 $1,200,000 Instructions: For part b, round your answers for dollar values to two decimal places (dollars and cents). For parts c-d, round your answers to one decimal place. a. Are the real GDP values in the table above accurate? (Click to select) b. This country's real GDP per capita for 2017 is $ and for 2018 is $ c. The growth rate in this country's real GDP per capita between 2017 and 2018 is %. d. The growth rate in the nominal GDP from 2017 to 2018 is %. The growth rate in the GDP deflator between 2017 and 2018 is The growth rate in the population between 2017 and 2018 is %. %.
Reference equation: Real GDP per capita growth rate = Nominal GDP per capita growth rate – Inflation rate – Population growth rate - - This equation is an approximation of the exact rate of growth of GDP per capita, and so it results in some errors when calculating this rate. However, the simplified equation both is easy to use and results in small error terms when inflation, nominal GDP growth, and population growth are low, and so it is a useful approximation. The table below lists a fictional country's nominal GDP, real GDP, GDP deflator, and population over two years. Year 2017 2018 Nominal GDP $1,100,000 GDP Deflator 100 105 Real GDP (2017 dollars) $1,100,000 $1,142,857 Population 1,000 1,005 $1,200,000 Instructions: For part b, round your answers for dollar values to two decimal places (dollars and cents). For parts c-d, round your answers to one decimal place. a. Are the real GDP values in the table above accurate? (Click to select) b. This country's real GDP per capita for 2017 is $ and for 2018 is $ c. The growth rate in this country's real GDP per capita between 2017 and 2018 is %. d. The growth rate in the nominal GDP from 2017 to 2018 is %. The growth rate in the GDP deflator between 2017 and 2018 is The growth rate in the population between 2017 and 2018 is %. %.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:Reference equation: Real GDP per capita growth rate = Nominal GDP per capita growth rate – Inflation rate – Population growth
rate
-
-
This equation is an approximation of the exact rate of growth of GDP per capita, and so it results in some errors when calculating this
rate. However, the simplified equation both is easy to use and results in small error terms when inflation, nominal GDP growth, and
population growth are low, and so it is a useful approximation. The table below lists a fictional country's nominal GDP, real GDP, GDP
deflator, and population over two years.
Year
2017
2018
Nominal GDP
$1,100,000
GDP Deflator
100
105
Real GDP (2017 dollars)
$1,100,000
$1,142,857
Population
1,000
1,005
$1,200,000
Instructions: For part b, round your answers for dollar values to two decimal places (dollars and cents). For parts c-d, round your
answers to one decimal place.
a. Are the real GDP values in the table above accurate? (Click to select)
b. This country's real GDP per capita for 2017 is $
and for 2018 is $
c. The growth rate in this country's real GDP per capita between 2017 and 2018 is
%.
d. The growth rate in the nominal GDP from 2017 to 2018 is
%.
The growth rate in the GDP deflator between 2017 and 2018 is
The growth rate in the population between 2017 and 2018 is
%.
%.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education