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Nominal Versus Real GDP

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Table: Nominal Versus Real GDP

Year Coffee (Cups) Milk (Gallons) GDP (nominal, real)
2002 (base year expenditure) Price $1.00
Quantity 10 Price $2.00
Quantity 20
2003 (Case 1 expenditure) Price $1.50
Quantity 10 Price $4.00
Quantity 20
2003 (Case 2 expenditure) Price $1.00
Quantity 15 Price $2.00
Quantity 40
2003 (Case 3 expenditure) Price $1.50
Quantity 15 Price $4.00
Quantity 40

Adding to the above Table, if real GDP in 1998 was $8,508.9 billion and nominal GDP in 1998 was $8,781.50 billion, calculate the percentage change from 1997 to 1998 in nominal GDP, real GDP, and the price level. What is the value of the GDP deflator in 1998?

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Solution Summary

Nominal Versus Real GDP is determined. The value of the GDP deflator are determined.

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Table: Nominal Versus Real GDP

Year Coffee (Cups) Milk (Gallons) GDP (nominal, real)
2002 (base year expenditure) Price $1.00
Quantity 10 Price $2.00
Quantity 20 50, 50
2003 (Case 1 expenditure) Price $1.50
Quantity 10 Price $4.00
Quantity 20 95, 50
2003 (Case 2 expenditure) Price $1.00
Quantity 15 Price $2.00
Quantity 40 95, 95
2003 (Case 3 expenditure) Price $1.50
Quantity 15 Price $4.00
Quantity 40 182.5, 95

Adding to the above Table, if real GDP in 1998 was $8,508.9 billion and nominal GDP in 1998 was $8,781.50 billion, calculate the percentage change from 1997 to 1998 in nominal GDP, real GDP, and the price level. What is the value of the GDP deflator in 1998?

The way to calculate GDP is this:

Nominal GDP = Sum Over Goods (Current Price ...

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