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Measuring unemployment, Balance of payments, GDP

Table 2-5 presents the price of and units of aggregate output for 199x and 199y.

(a) Present in Table 2-6, nominal GDP for 199x and 199y.

(b) Also calculate in Table 2-6 real output for 199y by measuring l99y output in l99x prices. What is the purpose of such a calculation?

(c) What is the GDP deflator in l99y?

Table 2-5 Aggregate Output in a Five-Good Economy
Good
199x
199y

Units Produced
Price
Units Produced
Price

A
25
$1.50
30
$1.60

B
50
7.50
60
8.00

C
40
6.00
50
7.00

D
30
5.00
35
5.50

E
60
2.00
70
2.50
Table 2-6 Nominal and real GDP for 199x and 199y

Good
Value of 199x Output
199x prices
Value of 199y Output
199y prices
Value of 199y Output
199x prices

A
$ 37.50
$ 48.00
$ 45.00

B
375.00
480.00
450.00

C
240.00
350.00
300.00

D
150.00
192.50
175.00

E
120.00
175.00
140.00

GDP
$922.50
$1245.50
$1110.00

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(a) Nominal GDP for l99x and 199y is found by multiplying the units produced each year by the respective price of each unit for that year and then summing the calculated values. Thus, as presented in Table 2-6, the value of good A in l99x is $37.50; ...

Solution Summary

Measuring unemployment, Balance of payments, GDP, and other factors is achieved.

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