Calculate the real GDP in each year, assuming that the nominal GDP was $559 billion in the base year, $577 billion in year one, and $605 billion in year two; and that the price index rose from 100 to 104.5 in the first year, and up to 108.3 in the second year. If the price index 20 years before the base year was 41.2, and the nominal GDP for 20 years before the base year was 191.0, what was the real GDP for that year? Show your work in all cases.

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Formula:
real GDP = nominal GDP * 100 / price index

Since the price index 20 years before was ...

Solution Summary

This solution calculates the real GDP in each year in this case.

See attached file:
Quantities Produced Quantities Produced Prices Prices
CDs Tennis Racquets CDs Tennis racquets
Year 2004 100 200 20 110
Year 2005 120 210 22 120
1. CalculaterealGDP for 2004 and 2005 using 2004 prices. By what percent did realGDP grow?
2. Calculatethe value of t

If realGDP were $3 trillion in year 1 and $3.06 trillion in year 2, the growth rate of realGDP between the two years is?
Year 1 the population was 300 million, and in year 2 the population was 306 million, what is the growth rate of the per-capita realGDP?

Suppose an economy's realGDP is $30,000 in year 1 and $31,200 in year 2.
1) What is the growth rate of its realGDP?
Assume that population is 100 in year 1 and 102 in year 2.
2) What is the growth rate of GDP per capita?

Suppose an economy's realGDP is $30,000 in year 1 and $31,200 in year 2. What is the growth rate of its realGDP? Assume that population is 100 in year 1 and 102 in year 2. What is the growth rate of GDP per capita?

Why is it important for a country to calculatetheir GDP and release this information to the public? Would it matter if they only reported nominal GDP and not realGDP? The calculation of GDP does not include everything, such as non-market and illegal activities; explain the relative importance of this for a country.

Consider an economy where only three products x,y, and z are produced and sold for the prices indicated below:
Product;(Base year price);(Current year price);(Current year production)
X; $1; $2; 200
Y; $4; $5; 50
Z; $5; $6; 100
A. What are the values of nominal GDP and realGDP in the current year?
B. Explain the dif

Use the data on U.S. realGDP below to compute realGDP per person for eachyear. Then use these numbers to compute the percentage increase in realGDP per person from 1987 to 2005.
YearRealGDP (2000 prices) Population
1987 $6,435,000 million 243 million
2005 $11,092,000 million 296.6 million

Visit the Bureau of Economic Analysis Web site, http://www.bea.gov, and access the BEA interactively by selecting National Income and Product Account Tables. Select Frequently Requested NIPA Tables, and use Tables 1.1 and 1.2 to identify theGDP (nominal GDP) and realGDP for the past four quarters. Why was nominal GDP greater t