**Question 2**Complete the following table for a given country and show how you can determine if the country faces an inflation in 2018?| | Nominal GDP2017 | | Nominal GDP2018 | | Real GDP2018 | ||---------------|---------------------------|-----------------------------------|---------------------------|-----------------------------------|-------------------------|-----------------------------------|| | Q | P | Q | P | Q | P || C | 4 | 2 | 3 | 4 | | || I | 3 | 3 | 4 | 3 | | || G | 6 | 2 | 5 | 3 | | || GDP | | | | | | |**Explanation:**- **Q** represents the quantity of goods and services.- **P** represents the prices of those goods and services. To determine if a country faces inflation in 2018, analyze the changes between the Nominal GDP and Real GDP. Inflation implies an increase in the general price level of goods and services.1. **Calculate Nominal GDP:** - For each year, multiply quantity (Q) by price (P) for each category (C, I, G) to find the GDP.2. **Calculate Real GDP for 2018:** - Use the prices (P) from 2017 and the quantities (Q) from 2018 to find Real GDP. This adjusts the GDP for inflation by removing the effect of price changes.3. **Compare GDPs:** - A rise in Nominal GDP that is not reflected in the Real GDP suggests inflation, as the increase in Nominal GDP is due to higher prices rather than increased production.**Calculations:**- For **2017**, calculate Nominal GDP: - C: $ 4 \times 2 = 8 $ - I: $ 3 \times 3 = 9 $ - G: $ 6 \times 2 = 12 $ - Total Nominal GDP2017: \( 8 + 9 + 12 = 29 \

here we calculate the real GDP , Nominal GDP , GDP deflator and Inflation rate and fill the table so…

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Complete the following table for a given country and show how can you determine if the country faces an inflation in 2018? Nominal GDP2017 Nominal GDP2018 Real GDP2010 P P 4 2 3 4 3 4 3. 6. 2 3 GDP

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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https://www.federalreserve.gov/aboutthefed/educational-tools/lecture-series-origins-and-mission.htm
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