Exercise 2: GDP and inflationConsider an economy that produces and consumes haircuts and cars. The next tablecontains data on two different years.20152021$50,000$60,000$10$20Number of cars100120Number of haircuts 500,000 400,000Price of a carPrice of a hair cuta) Compute the following indicators for each year using 2015 as your base year: nominalGDP, real GDP and the GDP deflator.b) How much did prices go up between 2015 and 2021? What has been the annualinflation rate?

Real GDP will be the inflation-adjusted GDP for a nation while the Nominal GDP refers to a Gross…

Consider an economy that produces and consumes haircuts and cars. The next table contains data on two different years 2015 $50,000 $10 Number of cars 100 Number of haircuts 500,000 Price of a car Price of a hair cut 2021 $60,000 $20 120 400,000 a) Compute the following indicators for each year using 2015 as your base year: nominal GDP, real GDP and the GDP deflator. b) How much did prices go up between 2015 and 2021? What has been the annual inflation rate?

Consider an economy that produces and consumes haircuts and cars. The next table contains data on two different years 2015 $50,000 $10 Number of cars 100 Number of haircuts 500,000 Price of a car Price of a hair cut 2021 $60,000 $20 120 400,000 a) Compute the following indicators for each year using 2015 as your base year: nominal GDP, real GDP and the GDP deflator. b) How much did prices go up between 2015 and 2021? What has been the annual inflation rate?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter15: Measuring A Nation's Income

Section: Chapter Questions

Problem 7QR

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Please help with this question on Real vs nomial GDP
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