Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 21.A, Problem 6SPP
To determine
To compute:
Real GDP in 2015 and 2016, when 2016 is taken as base year.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The table shows the quantities produced and prices in 2015 and 2016 for an island.
economy which produces only bananas and coconuts.
The base year is 2016.
Calculate real GDP in 2015 and 2016 using the chained-dollar method.
In terms of what dollars is each of these two real GDPS measured?
Real GDP in 2016 using the chained-dollar method is
$
Real GDP in 2015 using the chained-dollar method is
$
>>> Answer with a whole number
Real GDP in 2015 and real GDP in 2016 are measured in
▼ dollars
In 2015
Item
Bananas
Coconuts
In 2016
Item
Bananas
Coconuts
Quantity
99 bunches
53 bags
Quantity
114 bunches.
66 bags.
Price
$10 a bunch
$9 a bag
Price
$11 a bunch
$10 a bag
Question # 5
a: Calculate Nominal and Real GDP for each year. Consider the base year is 2013.
YearBottles of Diet Coke (units)Price by Bottle in Rs
2013100,00010.25
2014400,00030.50
2015500,00030.75
2016800,00040.25
b: Analyze how much Pakistan’s GDP and each of its components is affected by the following transactions? Explain your answers (Maximum 200 words).
i) Toyota Motors issues new shares to finance the construction of an automobile plant in Pakistan.ii) Your friend wins Rs.2 million in the lottery in Dubai iii) Rabia spends Rs.1500 to buy her husband dinner at the finest restaurant in Karachiiv) General Motors builds Rs.40 million worth of cars, but consumers only buy Rs. 38 million worth of them.v) Sadia spends 50000 on a computer to use in her editing business in Karachi. She got last year’s model on sale for a great price from a local manufacturer.
(Sub parts to solved).
The country of Opalia produces two goods: footballs and basketballs. Below is a table showing prices and
quantities of output for the past three years:
Price of Footballs Quantity of Footballs Price of Basketballs Quantity of Basketballs
Year
Year 1
10
120
12
200
Year 2
200
300
12
15
Year 3
275
14
180
18
a) Calculate the nominal GDP for each year.
b) Calculate the real GDP for each year. (use year 1 as base year)
c) Calculate the GDP deflator.
d) Calculate the inflation rate.
e) Re-do parts b)-d), but use year 2 as the base year. How do your answers differ?
Chapter 21 Solutions
Foundations of Economics (8th Edition)
Ch. 21.A - Prob. 1SPPCh. 21.A - Prob. 2SPPCh. 21.A - Prob. 3SPPCh. 21.A - Prob. 4SPPCh. 21.A - Prob. 5SPPCh. 21.A - Prob. 6SPPCh. 21.A - Prob. 7SPPCh. 21.A - Prob. 1IAPCh. 21.A - Prob. 2IAPCh. 21.A - Prob. 3IAP
Ch. 21.A - Prob. 4IAPCh. 21.A - Prob. 5IAPCh. 21.A - Prob. 6IAPCh. 21.A - Prob. 7IAPCh. 21 - Prob. 1SPPACh. 21 - Prob. 2SPPACh. 21 - Prob. 3SPPACh. 21 - Prob. 4SPPACh. 21 - Prob. 5SPPACh. 21 - Prob. 6SPPACh. 21 - Prob. 7SPPACh. 21 - Prob. 8SPPACh. 21 - Prob. 9SPPACh. 21 - Prob. 10SPPACh. 21 - Prob. 1IAPACh. 21 - Prob. 2IAPACh. 21 - Prob. 3IAPACh. 21 - Prob. 4IAPACh. 21 - Prob. 5IAPACh. 21 - Prob. 6IAPACh. 21 - Prob. 7IAPACh. 21 - Prob. 8IAPACh. 21 - Prob. 9IAPACh. 21 - Prob. 10IAPACh. 21 - Prob. 11IAPACh. 21 - Prob. 12IAPACh. 21 - Prob. 1MCQCh. 21 - Prob. 2MCQCh. 21 - Prob. 3MCQCh. 21 - Prob. 4MCQCh. 21 - Prob. 5MCQCh. 21 - Prob. 6MCQCh. 21 - Prob. 7MCQ
Knowledge Booster
Similar questions
- Assume an economy consumes only two goods: food and clothing. The prices and quantities produced domestically of each good for two different years are shown in the table below. Year 1 quantity Year 2 quantity Year 1 price Year 2 price Food 5000 5500 $2 $5 Clothing 1000 1200 $30 $25 What is the nominal GDP for year 2? What is the real GDP for year 2, using year 1 as the base year? What is the GDP deflator? (2 decimal places) What was the result on the overall price level? no ch increased decreasedarrow_forwardUsing the table below calculate the missing values. Take all calculations to 2 decimal places. $ not required. Year 2010 2011 2012 2013 2014 2015 Nominal GDP 2,450 2,660 2,870 3,155 Number 3,558.4 Real GDP Number 2,745 Number 3,025 3,140 3,353.4 GDP Deflator 0.94 Number 1.00 Number Number 1.06 Number Include a negative sign where appropriate in the following answers: Part 7: Nominal growth rate year (2010-11) Number Part 8: Nominal growth rate year (2012-13) Part 9: Inflation rate year (2010-11) Number Part 10: Real growth rate year (2011-12) Number Part 11: Inflation rate year (2014-15) Number Part 12: Real growth rate year (2013-14) Numberarrow_forwardFor the next questions, suppose that a simple economy produces only four goods and services: cars, homes, cheeseburgers and cheese. Assume all of the cheese are used in the production of the cheeseburgers. Also assume that Year1 is the base year. Using the information in the table, nominal GDP for this simple economy in year 1 equals Quantity Quantity Product Price (Year 1) Price (Year 2) (Year 1) (Year 2) Cars 50 25 100 30 Homes 10 50 15 60 Cheeseburgers 100 150 6 Cheese 50 2 75 3 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 2250 b 4150 2350 d 2700arrow_forward
- (3)Consider a stylized three-commodity economy that produces haircuts, hamburgers and DVDS. The quantities produced of each commodity and their market prices over three different years are presented below. Use the information and determine for each year (1999 = Base year) %3D (i)Nominal GDP (ii)Real GDP (iii)CPI (iv)GDP deflator PRODUCT. Q1 P1 (1999) Q2 P2 (2013) Q3 P3 (2014) Haircuts $10.00 3 $11.00 2 $16.20 Hamburgers 10 2.00 15 2.45 20 2.40 DVDS 15.00 8 15.00 10 14.00arrow_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 percentage change in nominal GDP from 1993 to 1994? b) What was the percentage change in nominal GDP from 1992 to 1993?arrow_forwardThe country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2008. Prices and Quantities Quantity of Price of Milk Quantity of Cereal Year Price of Cereal Milk 2008 54.00 90 $1.50 150 2009 $4.00 100 $2.00 180 real GDE Was $670, and the GDP deflaterwas 115.2 real GDP was 5C00, and the CDP deflator was 115.2 real GDP was 1660, and the GDP defator was 1134 d. real GDP was $670, and ihe GDP delltor was 113.4 Previous page Finish attermpt penerearrow_forward
- Gross Domestic Product a. In 1803 the United States purchased Louisiana and other territories (828,000 square miles) from France $14,904,000. The GDP deflator for that year was 5.27. How much money did we pay in current dollars? Was the purchase worth it? (use the nearest year for which data is available) b. In 1867 the United States bought Alaska from the Russian Empire for $7.2 million dollars. Use the web to find the a price index for that year and calculate the value of the purchase in current dollars? (use the nearest year for which data is available) c. List at least four factors that you think you will be important measures of the statndard of living other that per capita real GDP. How do these factors relate to per capita real GDP? How could trading more freely among countries affect the size of economies?arrow_forwardAnswer the questions given for a country that produces goods A and B and produces 2 goods according to the table below and write them in the relevant spaces in the answer box. (Base Year is 2010.) [Q: Quantity, P: Price, GDP: Gross Domestic Product] I. What is the Real GDP for 2010?ii. Nominal GDP for 2013arrow_forwardAs per the World Bank, Philippine Real GDP (constant 2015 prices) was at around 396,220,000,000 USD in 2019. Meanwhile the GDP deflator for 2015-2019 is given as follows: Year Deflator 2015 100.00 2016 101.29 2017 103.66 2018 * 107.53 2019 108.28 Given this information, compute for the Nominal GDP for the Philippines in 2019.arrow_forward
- Compute Nominal and Real GDP in each year and find percentage changes in the GDP. (Use 2001 as base year). Orange Dates Year Price Quantity Price Quantity 2001 6 100 1.50 800 2002 7 150 2.00 900 2003 8 200 2.50 1000arrow_forwardAssume that there are only 3 goods produced in the economy. As seen in the table above, price(P) and quantity(Q) of goods are given for each year. Base year is 2016. According to this, a)Calculate nominal GDP for each year. b)Calculate real GDP for each year 2015 2015 2016 2016 2017 2017 P Q P Q P Q Onion 1,2 400 1,5 600 2,5 400 Tomato 1 320 2,5 200 4 400 Pepper 4 50 12 50 14 50arrow_forwardConsider the following data for an economy that produces only two goods. In 2010, for Good A: Price = 100 and Quantity = 100, and for Good B: Price: 100 and Quantity = 100. In 2015, for Good A: Price = 200 and Quantity = 200, and for Good B: Price = Quantity 100. = 100 and = (a) Compute nominal GDP in 2010. (b) Compute nominal GDP in 2015. (c) Compute real GDP in 2010 (using 2010 as the base year).arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning