(a)Explain the difference between GDP and GNP with an example. (b)Table 1 shows some data on the prices and quantities for a simple economy that produces the following goods and services. Table 1: Price and quantity for three types of product Product [Produk] Year 2017 [Tahun 2017] Year 2018 [Tahun 2018] Year 2019 [Tahun 2019] Price (RM) [Harga (RM)] Quantity [Kuantiti] Price (RM) [Harga (RM)] Quantity [Kuantiti] Price (RM) [Harga (RM)] Quantity [Kuantiti] A 1 180 1 200 1.25 200 B 90 75 90 100 100 120 C 0.6 675 0.5 600 0.5 630 (i)Compute the values of nominal GDP in 2017, 2018 and 2019. (ii)Compute the values of real GDP and GDP deflator in 2018 and 2019 (using 2017 as the base year). (iii)Compute the percentage change in the real GDP in 2018 and 2019 from the preceding year. (c) Explain THREE (3) limitations in measuring the real GDP.

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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(a)‌Explain‌ ‌the‌ ‌difference‌ ‌between‌ ‌GDP‌ ‌and‌ ‌GNP‌ ‌with‌ ‌an‌ ‌example.‌ ‌

‌

(b)‌Table‌ ‌1‌ ‌shows‌ ‌some‌ ‌data‌ ‌on‌ ‌the‌ ‌prices‌ ‌and‌ ‌quantities‌ ‌for‌ ‌a‌ ‌simple‌ ‌economy‌ ‌that‌ ‌produces‌ ‌the‌ ‌following‌ ‌goods‌ ‌and‌ ‌services.‌ ‌

‌

Table‌ ‌1:‌ ‌Price‌ ‌and‌ ‌quantity‌ ‌for‌ ‌three‌ ‌types‌ ‌of‌ ‌product‌ ‌

‌

Product‌ ‌ [Produk]‌ ‌	Year‌ ‌2017‌ ‌ ‌ [Tahun‌ ‌2017]‌ ‌	Year‌ ‌2018‌ ‌ ‌ [Tahun‌ ‌2018]‌ ‌	Year‌ ‌2019‌ ‌ ‌ [Tahun‌ ‌2019]‌ ‌
Price‌ ‌ (RM)‌ ‌ [Harga‌ ‌ (RM)]‌ ‌	Quantity‌ ‌ ‌ [Kuantiti]‌ ‌	Price‌ ‌ (RM)‌ ‌ [Harga‌ ‌ (RM)]‌ ‌	Quantity‌ ‌ ‌ [Kuantiti]‌ ‌	Price‌ ‌ (RM)‌ ‌ [Harga‌ ‌ (RM)]‌ ‌	Quantity‌ ‌ ‌ [Kuantiti]‌ ‌
A‌ ‌	1‌ ‌	180‌ ‌	1‌ ‌	200‌ ‌	1.25‌ ‌	200‌ ‌
B‌ ‌	90‌ ‌	75‌ ‌	90‌ ‌	100‌ ‌	100‌ ‌	120‌ ‌
C‌ ‌	0.6‌ ‌	675‌ ‌	0.5‌ ‌	600‌ ‌	0.5‌ ‌	630‌ ‌

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(i)‌Compute‌ ‌the‌ ‌values‌ ‌of‌ ‌nominal‌ ‌GDP‌ ‌in‌ ‌2017,‌ ‌2018‌ ‌and‌ ‌2019.‌ ‌ ‌

‌ ‌

(ii)‌Compute‌ ‌the‌ ‌values‌ ‌of‌ ‌real‌ ‌GDP‌ ‌and‌ ‌GDP‌ ‌deflator‌ ‌in‌ ‌2018‌ ‌and‌ ‌2019‌ ‌

(using‌ ‌2017‌ ‌as‌ ‌the‌ ‌base‌ ‌year).‌ ‌ ‌

‌

(iii)‌Compute‌ ‌the‌ ‌percentage‌ ‌change‌ ‌in‌ ‌the‌ ‌real‌ ‌GDP‌ ‌in‌ ‌2018‌ ‌and‌ ‌2019‌ ‌

from‌ ‌the‌ ‌preceding‌ ‌year.‌ ‌ ‌

‌

(c)‌ ‌Explain‌ ‌‌THREE‌ ‌(3)‌‌ ‌limitations‌ ‌in‌ ‌measuring‌ ‌the‌ ‌real‌ ‌GDP.‌ ‌

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