Answered: Assume that in Berberistan only three…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume that in Berberistan only three goods are produced: coffee, tea, and
cheesecake. The table below shows the prices and quantities of the three goods in 2018,
2019 and 2020. (Take 2018 as the base year when necessary)
2018 2019 2020
Quantity price quantity Price quantity Price
Coffee 2 20 6 10 5 12
Tea 20 2 20 2 25 3
Cheesecake 15 8 10 10 15 5
a) What is the nominal GDP in 2019.
b) What is the nominal GDP in 2020.
c) What is the real GDP in 2019.
d) What is the real GDP in 2020.
e) What is the real economic growth from 2019 to 2020.

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

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