Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 19, Problem 19.3.3RQ
To determine
The relationship between Nominal GDP and Real GDP
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A country produces only sugar and wheat in the quantities and prices listed below. The GDP deflator is given by Nominal GDP/Real GDP *100.
If 2018 is the base year,
i. What is the GDP deflator for years 2019 and 2020? Show your workings
ii. What is the inflation rate year 2019-2020? Show your workings
Year
Price of sugar
Quantity of sugar
Price of wheat
Quantity of wheat
2018
$2.00
200
$10
40
2019
$2.30
250
$14
50
2020
$2.75
280
$18
80
1. The following prices and quantities produced were recorded in computer land during the years shown and Calculate the following and show your work.
a) Using the GDP deflator what was the average annual rate of inflation during 1993 and 1994?
Describe the GDP deflator and how it is used to measure inflation.
Chapter 19 Solutions
Economics (7th Edition) (What's New in Economics)
Ch. 19 - Prob. 19.1.1RQCh. 19 - Prob. 19.1.3RQCh. 19 - Prob. 19.1.4RQCh. 19 - Prob. 19.1.5RQCh. 19 - Prob. 19.1.6PACh. 19 - Prob. 19.1.7PACh. 19 - Prob. 19.1.8PACh. 19 - Prob. 19.1.9PACh. 19 - Prob. 19.1.10PACh. 19 - Prob. 19.1.11PA
Ch. 19 - Prob. 19.1.14PACh. 19 - Prob. 19.2.1RQCh. 19 - Prob. 19.2.2RQCh. 19 - Prob. 19.2.3RQCh. 19 - Prob. 19.2.4PACh. 19 - Prob. 19.2.9PACh. 19 - Prob. 19.2.10PACh. 19 - Prob. 19.3.1RQCh. 19 - Prob. 19.3.2RQCh. 19 - Prob. 19.3.3RQCh. 19 - Prob. 19.3.4PACh. 19 - Prob. 19.3.5PACh. 19 - Prob. 19.3.6PACh. 19 - Prob. 19.3.7PACh. 19 - Prob. 19.3.8PACh. 19 - Prob. 19.3.9PACh. 19 - Prob. 19.3.10PACh. 19 - Prob. 19.4.1RQCh. 19 - Prob. 19.4.3RQCh. 19 - Prob. 19.4.4PACh. 19 - Prob. 19.4.6PACh. 19 - Prob. 19.4.7PACh. 19 - Prob. 19.4.8PACh. 19 - Prob. 19.1RDECh. 19 - Prob. 19.2RDECh. 19 - Prob. 19.6RDECh. 19 - Prob. 19.7RDE
Knowledge Booster
Similar questions
- Nominal GDP in Nowhereland in 2018 and 2019 is as follows: Can you say that the production of goods and services in Nowhereland has increased between 2018 and 2019? Why or why not?arrow_forward1. The following prices and quantities produced were recorded in computer land during the years shown and Calculate the following and show your work. a) What was the GDP deflator in 1993? b) Using the GDP deflator what was the average annual rate of inflation during 1993 and 1994?arrow_forwardQuestion 1: In an economy, there are only two goods (Cars and cycles) produced. The data for last three years is given in the below table. Calculate the nominal and real GDP of three years and then find the GDP deflator for all the three years. Find year on year (YoY) inflation for 2018 and 2019. Note: the base year for this economy is given as 2017. year Price of Car (AED) Number of Car Price of cycle (AED) Number of cycle 2017 1000 10 200 900 2018 1200 15 210 1000 2019 1500 25 250 1500 Question 2: Explain the role of fiscal and monetary policy in an economy facing a recession. Use appropriate graph to justify your answerarrow_forward
- The table below contains data for the country of Dachsland, which produces only pretzels and books. The base year is 2005. Year Price of Pretzels Quantity of Pretzels Price of Books Quantity of Books 2005 $4 90 $ 1.5 150 2006 5 100 2 180 2007 6 120 2.5 200 - Compute: nominal GDP, real GDP, GDP deflator, and Inflation rate in 2007.arrow_forwardNominal gross domestic product for the United States was $7,661.6 billion in 1996 and$8,110.9 billion in 1997. The GDP deflator was 109.5 in 1996 and 111.6 in 1997. What was the percent change in real GDP between 1996 and 1997?What was inflation between 1996 and 1997?arrow_forwardIf I have an economy that produces only one good and in year i the quantity is Qi and the price is Pi. Assuming year 1 is the base year and assuming 3 years of economic activity. How do I find the nominal GDP and the real GDP? Is it possible to find these with only this information?arrow_forward
- What is the difference between using a measure of inflation such as the consumer prices index (CPI) and the GDP deflator? Which do you think is the more accurate measure of price changes in an economy?arrow_forwardWHich of the following is a NOMINAL variable? a.Price level b.Unemployment c.Investment d.Real GDParrow_forwardQuestion a.Calculate GDP Deflator for all three years. b.Calculate Inflation rate in year 2 and year 3. c.Now calculate Inflation rate in year 3 compared to year 2.arrow_forward
- What is the relationship between real GDP and CPIarrow_forwardGross domestic product (GDP) is a measure of the market value of final goods and services produced within the borders of a country during a specific time period, usually a year. What is the GDP deflator? How does the GDP deflator relate to real GDP? Review GDP and nominal versus real. Real adjusts for inflation, so how do we arrive at the real GDP number from nominal GDP? Review the GDP deflator formula, where GDP deflator = (Nominal GDP/Real GDP) X 100.arrow_forwardConsider the table below. Year CPI CPI Inflation Real GDP Nominal GDP GDP Deflator GDP Inflation 2005 92.65 x 4159.10 3833.00 92.1593614 x 2006 100.00 a 4409.10 d 100.00 8.51 2007 b 11.05 5281.47 6098.33 115.47 e 2008 122.59 c f 7740.73 129.37 12.04 Based on the values of the table, what is the correct value for c ? (Please round your answer to include 2 decimal places)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc