Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
The table below is extracted from Happy land Republic, Bureau of Statistics records
for 2018-2019. Use the information in this table to answer the questions that follow.
| item | base year | 2015 | 2016 | |
| production | production | price | ||
| used car sales | 5,000 | 2000.00 | 6,000 | 2,500 |
| factories components sales | 8,000 | 500.00 | 10,000 | 1200.00 |
| cloth sales | 8,000 | 20.00 | 14,000 | 35.00 |
| beef sales | 1,500 | 10.00 | 1,800 | 12.00 |
| milk litres sales | 5,000 | 1.30 | 6,000 | 2.50 |
| computers sales | 2000 | 500.00 | 2500 | 800.00 |
| printers sales | 500 | 300.00 | 400 | 355.00 |
| raw materials for tractor assembling plant sales | 4500 | 250.00 | 4450 | 300.00 |
i. Calculate Happy Land Republic’s nominal GDP and real GDP in 2016
ii. Why does real GDP always defer from nominal GDP?
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