China’s real GDP increased 6.9 percent in the first quarter of 2017 from a year earlier. Investment grew by 9.2 percent and retail sales by 10.9 percent. In current prices, GDP increased by 11.8 percent from a year earlier. 1. Explain why the growth rate of GDP in current prices does not provide information about how quickly the economy is really growing.
China’s real GDP increased 6.9 percent in the first quarter of 2017 from a year earlier. Investment grew by 9.2 percent and retail sales by 10.9 percent. In current prices, GDP increased by 11.8 percent from a year earlier. 1. Explain why the growth rate of GDP in current prices does not provide information about how quickly the economy is really growing.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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China’s real GDP increased 6.9 percent in the first quarter of 2017 from a year earlier.
Investment grew by 9.2 percent and retail sales by 10.9 percent. In current
increased by 11.8 percent from a year earlier.
1. Explain why the growth rate of GDP in current prices does not provide information
about how quickly the economy is really growing.
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