4. Real versus nominal GDPConsider a simple economy that produces two goods: pencils and envelopes. The following table shows the prices and quantities of the goods over athree-year period.Year201720182019Year201720182019Price(Dollars per pencil)125PencilsNominal GDP(Dollars)Use the information from the preceding table to fill in the following table.Quantity(Number of pencils)120120120From 2018 to 2019, nominal GDPReal GDP(Base year 2017, dollars)Price(Dollars per envelope)and real GDPEnvelopes44Why is real GDP a more accurate measure of an economy's production than nominal GDP?Quantity(Number of envelopes)190200140O Real GDP is not influenced by price changes, but nominal GDP is.O Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.O Real GDP does not include the value of intermediate goods and services, but nominal GDP does.

Nominal GDP = price of current year * quantity of current year Real GDP = price of base year *…

Answered: 4. Real versus nominal GDP Consider a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Real versus nominal GDP Consider a simple economy that produces two goods: coffees and seltzers. The following table shows the prices and quantities of the goods over a three-year period. Price Coffees Quantity Price Seltzers Quantity Year (Dollars per coffee) (Number of coffees) (Dollars per seltzer) (Number of seltzers) 2018 3 260 2 160 2019 4 120 2 220 2020 3 155 2 140 Use the information from the preceding table to fill in the following table. Nominal GDP (Dollars) Real GDP (Base year 2018, dollars) GDP Deflator Year 2018 2019 2020
Consider the table. Shirts Pants Year Price Quantity Price Quantity 2013 $5.50 1500 $10.00 5000 2014 $7.50 1500 $15.00 4000 The table contains prices and output for a two good economy. Nominal and real GDP in 2013 are both $58,250. Use the information in the table to answer the questions. What is nominal GDP in 2014? $ What is real GDP in 2014? Use 2013 as the base year. $ Real output from 2013 to 2014 has decreased. increased. stayed the same. experienced inflation.
Consider a simple economy that produces two goods: pencils and oranges. The following table shows the prices and quantities of the goods over a three-year period. Pencils Oranges Price Price Quantity Quantity (Dollars per pencil) (Number of pencils) (Dollars per orange) (Number of oranges) Year 2016 125 1 200 2017 2 170 230 2018 4 150 4 170 Use the information from the preceding table to fill in the following table. Real GDP Nominal GDP (Dollars) (Base year 2016, dollars) GDP Deflator Year 2016 2017 2018 From 2017 to 2018, nominal GDP , and real GDP The inflation rate in 2018 was Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes. Real GDP does not include the value of intermediate goods and services, but nominal GDP does. Real GDP is not influenced by price changes, but nominal GDP is.
2 Calculate GDP for the Yukon Economy Using 3 Methods Consider the Yukon territory, which is very isolated and thus a closed economy. It has two producers (one of potatoes (a farmer) and the other of fried potatoes (a cafe)) a government that administers the postal service, and a consumer. Use the Yukon's national accounts data, given below, to calculate GDP using the product approach, the income approach, and the expenditure approach. Do this by filling out the tables provided below the national accounts data. Table 2: Yukon National Accounts Firms Government Consumer Potato Producer Breakfast Cafe Total Revenue 4 Total Revenue Tax Revenue | 3 Wage Income 6. Interest on Loan 1 Cost of Potatoes 1 Wages 3 Interest Income Wages 1 Wages Taxes Taxes Taxes 1 Profits Distributed from Prod. 1 Table 3: GDP Calculations (for you to complete) Product Approach Expenditure Approach Income Approach Value added of... Consumption Wage Income Potato Producer Investment After-Tax Profits Breakfast Cafe…
Consider a simple economy that produces two goods: apples and envelopes. The following table shows the prices and quantities of the goods over a three-year period. Year Apples Envelopes Price Quantity Price Quantity (Dollars per apple) (Number of apples) (Dollars per envelope) (Number of envelopes) 2016 2 115 5 175 2017 4 150 2 180 2018 1 100 2 160 Use the information from the preceding table to fill in the following table. Year Nominal GDP (Dollars) Real GDP (Base year 2016, dollars) GDP Deflator 2016 2017 2018 From 2017 to 2018, nominal GDP: (a. increased, b. decreased), and real GDP (a. increased, b. decreased) . The inflation rate in 2018 was: (a. -47.5%, b. -0.5%, c. 47.5%, d. 52.5%, e. 190.5%) . Why is real GDP a more accurate measure of an economy's production than nominal GDP? a. Real GDP includes the value of exports, but nominal GDP does not.…
Consider a simple economy that produces two goods: pencils and muffins. The following table shows the prices and quantities of the goods over a three-year period. Year Pencils Muffins Price Quantity Price Quantity (Dollars per pencil) (Number of pencils) (Dollars per muffin) (Number of muffins) 2018 1 140 2 200 2019 2 125 4 220 2020 3 120 4 180 Use the information from the preceding table to fill in the following table. Year Nominal GDP Real GDP GDP Deflator (Dollars) (Base year 2018, dollars) 2018 2019 2020 From 2019 to 2020, nominal GDP , and real GDP . The inflation rate in 2020 was . Why is real GDP a more accurate measure of an economy's production than nominal GDP? Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not. Real GDP measures the value of the goods and services an economy produces,…
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
13
Consider a simple economy that produces two goods: cheese and wine. The following table shows the prices and quantities of the goods over a three-year period. Please explain the formulas you used to get your answer. Grapes Аpple S Year Price Quantity Quantity Price 2017 $21 110 $30 500 2019 $24 145 $30.5 500 2019 $24 150 $31 520 For each year, calculate nominal GDP, real GDP, and the GDP deflator. Use 2017 as the base year. Fill in the cells in the table below and submit it in your answer. In your answer. Year Nominal GDP RGDP GDP deflator 2018 2019 2020
Chapter 14 2012 2013 Item Quantity Price Quantity Price Bananas 100 $10 110 $15 Coconuts 50 $12 60 $10 An island economy produces only bananas and coconuts. The table gives the quantities produced and prices in 2012 and in 2013. 1. Calculate nominal GDP in 2012 and nominal GDP in 2013. R: Nominal GDP in 2013 ($15 x 110) + ($10 x 60)-$1,650+ $600-$2,250. 2. Calculate the value of 2013 production in 2012 prices and the percentage increase in production when valued at 2012 prices. R: 3. Calculate the value of 2012 production in 2013 prices and the percentage increase in production when valued at 2013 prices. R: 4. Use the chained-dollar method to calculate real GDP in 2012 and 2013. In terms of what dollars is each of these two real GDPS measured? R: 5. Using the chained-dollar method, compare the growth rates of nominal GDP and real GDP in 2013. R: Page fof1 21 of 167 wordh Engish (Unimed Statesi Fecua
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. Cupcakes Erasers Price Quantity Price Quantity Year (Dollars per cupcake) (Number of cupcakes) (Dollars per eraser) (Number of erasers) 2015 1 110 1 180 2016 2 140 4 210 2017 4 100 4 190 Use the information from the preceding table to fill in the following table. Nominal GDP Real GDP Year (Dollars) (Base year 2015, dollars) GDP Deflator 2015 2016 2017 From 2016 to 2017, nominal GDP and real GDP
Using the table below, Pear Phone Year Price (S) Quantity Price (S) Quantity 2015 3 210 450 54 2016 4 200 500 50 14. Compute nominal GDP in each year. 15. By what percentage did the nominal GDP change between 2015 and 2016? 16. Compute real GDP each year by using "2015" as the base year. 17. By what percentage did real GDP change between 2015 and 2016? 18. By using the table and your answers to #15, and #17, explain (in one or two paragraphs) why "real GDP" is better than "nominal GDP" in measuring the production activity of an eçonomy. LA

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