1. Suppose people consume 3 different goods. The following table shows the prices and quantitiesof each good consumed in 2019, 2020, and 2021.Year Price ofPizza2019 $82020 $ 102021 $ 13Quantity of Price ofPizzaBurger350500700$10$12$ 14Quantity ofBurger200250400a. Calculate nominal GDP in each of the three years.e. Using the CPI calculate the rate of inflation.Price of coffee Quantity ofCoffee$8$ 10$15b. Calculate Real GDP in each of the three years, using 2019 as the base year.c. Calculate the rate of inflation for 2020 and 2021 using the GDP deflator as your price index.Assume that 2019 is still the base year.d.Using the quantities from 2019 for your market basket, and 2019 as your basethe CPI for 2019, 2020 and 2021.150250400year, calculate

As per Bartelby’s guidelines first three sub-parts should be done.

1. Suppose people consume 3 different goods. The following table shows the prices and quantities of each good consumed in 2019, 2020, and 2021. Year Price of Pizza 2019 $8 2020 $10 2021 $ 13 Quantity of Price of Pizza Burger 350 500 700 $ 10 $12 $ 14 Quantity of Burger 200 250 400 a. Calculate nominal GDP in each of the three years. Price of coffee Quantity of Coffee $8 $ 10 $15 150 250 400 b. Calculate Real GDP in each of the three years, using 2019 as the base year. c. Calculate the rate of inflation for 2020 and 2021 using the GDP deflator as your price index. Assume that 2019 is still the base year.

1. Suppose people consume 3 different goods. The following table shows the prices and quantities of each good consumed in 2019, 2020, and 2021. Year Price of Pizza 2019 $8 2020 $10 2021 $ 13 Quantity of Price of Pizza Burger 350 500 700 $ 10 $12 $ 14 Quantity of Burger 200 250 400 a. Calculate nominal GDP in each of the three years. Price of coffee Quantity of Coffee $8 $ 10 $15 150 250 400 b. Calculate Real GDP in each of the three years, using 2019 as the base year. c. Calculate the rate of inflation for 2020 and 2021 using the GDP deflator as your price index. Assume that 2019 is still the base year.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5. Real versus nominal GDP Consider a simple economy that produces two goods: cupcakes and muffins. The following table shows the prices and quantities of the goods over a three-year period. Year 2016 2017 2018 Year 2016 2017 2018 Price (Dollars per cupcake) 2 4 Nominal GDP (Dollars) 290 960 420 1 Cupcakes Use the information from the preceding table to fill in the following table. From 2017 to 2018, nominal GDP Quantity (Number of cupcakes) 115 150 100 The inflation rate in 2018 was Real GDP (Base year 2016, dollars) GDP Deflator 290 Price (Dollars per muffin) 5 and real GDP 2 Muffins 2 Why is real GDP a more accurate measure of an economy's production than nominal GDP? Quantity (Number of muffins) 175 180 O Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. O Real GDP includes the value of exports, but nominal GDP does not. Real GDP is not influenced by price changes, but nominal GDP is. 160
4. GDP vs Real GDP Consider a simple economy that produces two goods: cupcakes and oranges. The following table shows the prices and quantities of the goods over a three-year period. Cupcakes Oranges Price Quantity Price Quantity Year (Dollars per cupcake) (Number of cupcakes) (Dollars per orange) (Number of oranges) 2008 1 120 190 2009 160 4 200 2010 130 4 195 Use the information from the previous table to fill in the following table. GDP Real GDP Year (Dollars) (Base year 2008, dollars) 2008 2009 2010 From 2009 to 2010, GDP and real GDP Why is real GDP a more accurate measure of an economy's production than GDP? Real GDP includes the value of exports, but GDP does not. Real GDP does not include the value of intermediate goods and services, but GDP does. Real GDP is not influenced by price changes, but GDP is. 2. 3.
The following table contains information about an economy that produces only soda and pizza. The base year is 2020. Use this information to answer the question. Year Price of Soda Quantity of Soda 2020 100 $10 2021 120 12 2022 120 14 What is the approximate percentage increase in prices from 2021 to 2022? a. 0 percent b. 13 percent c. 16 percent d. 22 percent e. 38 percent $3 3 4 Price of Pizza Quantity of Pizza 50 70 70
d. Calculate the missing information in the table 17.1. Price of Nutmeg Price of Drapes ($ per Nutmeg) ($ per Drapes) Year Real GDP Nominal GDP GDP Deflator 2013 2700 70 10 8 2014 3600 100 12 9 2015 3600 4680 14 10
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The following table shows the goods produced in 2020 and 2023. Use this table to answer the following question. Shirts Shoes Hats O $18,500 O $29,250 O $33,700 $25,500 Price ($) 50 90 2020 35 Quantity 100 What is the nominal GDP of 2023? 150 200 Price ($) 60 110 30 2023 Quantity 120 200 150
5. Real versus nominal GDP Consider a simple economy that produces two goods: cupcakes and erasers. The following table shows the prices and quantities of the goods over a three-year period. Year 2017 2018 2019 Year 2017 2018 2019 Cupcakes Price (Dollars per cupcake) 1 2 Quantity (Number of cupcakes) 110 140 100 Use the information from the preceding table to fill in the following table Nominal GDP Real GDP (Dollars) (Base year 2017, dollars) Price (Dollars per eraser) 1 Erasers GDP Deflator Quantity (Number of erasers) 180 210 190
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1. Farmer Brown produces $100 worth of milk. He sells $40 worth of the milk in the market and uses the rest to feed his pigs, which he sells in the market for $120. What is Farmer Brown's contribution to the nation's GDP?