Consider the information provided in the table below: Coke Pepsi 2001 2002 30 20
ID: 1134816 • Letter: C
Question
Consider the information provided in the table below: Coke Pepsi 2001 2002 30 20 Base year 40 60 4 4. 1. (12 points; 4 points cach) Calculate the value of: Nominal GDP, Real GDP and the GDP Deflator for the year 2002. 4. 2. (6 points) Calculate the value of the CPI (Consumer Price Index) for 2002. Recall from class that CPI 2002 [(cost of base year basket in 2002) / (cost of base year basket at the base)*100 4. 3. (2 points) Compare the value of the GDP Deflator and the CPI for 2002. Explain why the CPI gives a higher number.Explanation / Answer
Answer:- Base year= 2001 4.1 Nominal GDP 2002: sum (P*q) of current year Real GDP 2002: sum of base year price* current year quantity 2002 NGDP 280 Real GDP 260 GDP Deflator 107.69 4.2 CPI_2002 114.2857 4.3 CPI is higher than GDP deflator for year 2002. GDP Deflator is a measure of all goods and services while the CPI is a measure of only goods bought by consumers.