Consider a simple economy that produces two goods: beers and paper plates. The following table shows the prices and quantities of the goods over athree-year period.BeersPaper platesPriceQuantityPriceQuantityYear(Dollars per beer)(Number of beers) (Dollars per paper plate) (Number of paper plates)201922552195202031653190202121303195Use the information from the preceding table to fill in the following table.Nominal GDP(Dollars)Real GDP(Base year 2019, dollars) GDP DeflatorYear201920202021From 2020 to 2021, nominal GDP'and real GDPThe inflation rate in 2021 wasWhy is real GDP a more accurate measure of an economy's production than nominal GDP?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.Real GDP includes the value of exports, but nominal GDP does not.

Understanding the ConceptsNominal GDP:This measures a country's total economic output (goods and…

Answered: Consider a simple economy that produces…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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.
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.…
The table below presents a brief summary of City A’s total spending, local GDP, and population changes. Read the table and answer the following questions. 2010 2020 Total spending ($ million) 89 104.12 Local GDP ($ millions) 110 134 Population 50,000 56,275 CPI deflators (2012=1) 0.96 1.05 Calculate % change for City A’s total spending from 2010 to 2020 in current dollars. *Results round to the nearest 2 decimal places. Calculate % change for City A’s total spending from 2010 to 2020 in constant dollars. *Results round to the nearest 2 decimal places. Why does % change calculated from constant dollars differ from % change calculated from current dollar? Calculate per capita spending in 2010 and 2020, respectively, using constant dollars. *Results round to the nearest dollar. 2010 per capita spending: 2020 per capita spending: Calculate the compound annual growth rate of per capita spending from 2010 to 2020…
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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
Suppose that a very simple economy produces three goods: pizzas, haircuts, and backpacks. Suppose the quantities produced and their corresponding prices for 2002 and 2006 are shown in the table: 2002 2006 Product Quantity Price $10 $15 $40 Quantity Price Pizzas Haircuts 100 120 $12 $20 $45 50 45 Backpacks 200 210 Calculate real GDP in 2006 assuming the base year is 2002. Do the same calculation assuming the base year is 2006. Are the calculations different? Why?
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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
A hypothetical country of Narnia produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown in the following table. The base year is 2017. Year 2016 2017 2018 2019 Price (Dollars per movie) 7.6% 7.5% Movies 7.2% 7% 10.00 11.00 12.00 12.00 Quantity Quantity (Movies) (Dollars per bag) (Bags) 500 600 650 625 Popcorn Refer to Table 23-5. What was the rate of inflation for Narnia in 2019? (Hint: round-off to the nearest decimal point) Price 5 4 5 6 1,000 900 950 925
The economy of Tuland produces only two products fish and watches. The following information is available for production and prices of Tuland's products for the years 2009 and 2010. 2010 132 2009 Quantity of fish 120 Quantity of watches Price of fish Price of watches 100 130 $8.00 $30.00 $9.20 $31.50 Using the above information, calculate the following values. (Enter your responses rounded to two decimal places.) GDP for 2009 in 2009's prices GDP for 2009 in 2010's prices GDP for 2010 in 2009's prices GDP for 2010 in 2010's prices Using 2009 as the base year, compute the percentage change in the price level, i.e. the inflation rate. hint: you need to compute the GDP deflator first. % % % Using 2010 as the base year, compute the percentage change in the price level, i.e. the inflation rate. hint: you need to compute the GDP deflator first. The geometric average of the two inflation rates
The economy of Tuland produces only two products fish and watches. The following information is available for production and prices of Tuland's products for the years 2009 and 2010. 2010 132 69 2009 120 Quantity of fish Quantity of watches Price of fish 60 $8.00 $9.20 Price of watches $30.00 $31.50 Using the above information, calculate the following values. (Enter your responses rounded to two decimal places.) GDP for 2009 in 2009's prices GDP for 2009 in 2010's prices GDP for 2010 in 2009's prices GDP for 2010 in 2010's prices Using 2009 as the base year, compute the percentage change in the price level, i.e. the inflation rate. hint: you need to compute the GDP deflator first. Using 2010 as the base year, compute the percentage change in the price level, i.e. the inflation rate. hint: you need to compute the GDP deflator first. The geometric average of the two inflation rates $ 69 % % %
The following data represents the output and price of the goods and services produced in the country of Florin in 2018, which specializes in the production of just three things. 2017 is the base year. Production Data Products 2017 Quantity 2017 Price 2018 Quantity 2018 Price haircuts 8 686 face wash 8 3 3.8 prom dresses 2 4 1 5 Calculate Florin's 2017 GDP deflator.

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