Please Kindly Answer The Following Question: Please be accurate 1- Consider the
ID: 1169696 • Letter: P
Question
Please Kindly Answer The Following Question: Please be accurate
1- Consider the following economy:
Prices and Quantities
Year
Price Good 1
Quantity
Price Good 2
Q2 (1000)
2010
$3
105
$4
50
2011
$4
115
$5
65
2012
$4.50
120
$7
60
2013
$6.50
125
$8
70
Calculate the Nominal GDP for each year
Calculate the real GDP for each year using 2010 as the base year.
Calculate the GDP deflator for each year.
Year
Nominal GDP
Real GDP
GDP Deflator
2010
2011
2012
2013
2- Calculate the GDP
3- What is the GDP deflator if real GDP = 3450?
Thanl you
Prices and Quantities
Year
Price Good 1
Quantity
Price Good 2
Q2 (1000)
2010
$3
105
$4
50
2011
$4
115
$5
65
2012
$4.50
120
$7
60
2013
$6.50
125
$8
70
Explanation / Answer
The following formulae have been used while calculating Nominal GDP, Real GDP and GDP deflator
Nominal GDP = (Current year Price of good 1* Current year quantity of good 1) + (Current year Price of good 2* Current year quantity of good 2)
Real GDP = (Base year Price of good 1* Current year quantity of good 1) + (Base year Price of good 2* Current year quantity of good 2)
GDP deflator = Nominal GDP/Real GDP * 100
Prices and Quantities Year Price Good 1 Quantity Price Good 2 Q2 (1000) Nominal GDP ($) Real GDP ($) GDP Deflator 2010 $3 105 $4 50 200315 200315 100 2011 $4 115 $5 65 325460 260345 125.011043 2012 $4.50 120 $7 60 420540 240360 174.9625562 2013 $6.50 125 $8 70 560812.5 280375 200.0222916