2009 Quantity2009 Price2010 Quantity2010 Price(base year)Food2.582.5Clothes561010Entertainment 24551. The table above shows the outputs and prices of goods and services in Happyvale.Assuming that 2009 is the base year, calculate:a) The nominal gross domestic product (GDP) in 2010b) The real GDP in 2010c) If in one year, the price index is 50 and in the next year, the price index is 55,what is the rate of inflation from one year to the next?d) Assume that next year's wage rate will be 3 percent higher than this year'sbecause of inflationary expectations. The actual inflation rate is 4 percent. At thebeginning of next year, will the real wage be higher, lower, or the same as today?Explain.e) Assume that Mark gets a fixed-rate loan from a bank when the expected inflationrate is 3 percent. If the actual inflation rate turns out to be 4 percent, who benefitsfrom the unexpected inflation: Mark, the bank, neither, or both? Explain.

We have the following information- 2009 Quantity 2009 Prices(base year) 2010 Quantity 2010…

2009 Quantity 2009 Price 2010 Quantity 2010 Price (base year) Food 2.5 2.5 5 Entertainment 2 Clothes 6 10 10 4 5 5 1. The table above shows the outputs and prices of goods and services in Happyvale. Assuming that 2009 is the base year, calculate: a) The nominal gross domestic product (GDP) in 2010 b) The real GDP in 2010 c) If in one year, the price index is 50 and in the next year, the price index is 55, what is the rate of inflation from one year to the next?

2009 Quantity 2009 Price 2010 Quantity 2010 Price (base year) Food 2.5 2.5 5 Entertainment 2 Clothes 6 10 10 4 5 5 1. The table above shows the outputs and prices of goods and services in Happyvale. Assuming that 2009 is the base year, calculate: a) The nominal gross domestic product (GDP) in 2010 b) The real GDP in 2010 c) If in one year, the price index is 50 and in the next year, the price index is 55, what is the rate of inflation from one year to the next?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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