he following table shows the outputs and prices of three products A, B and C by a small economy in 2019, 2020 and 2021. 2019 2020 2021 Product price qty price qty price qty A $4 50 $5 55 $6 60 B $3 40 $5 42 $8 45 C $2 20 $3 25 $4 28 (A) Compute the nominal GDP, the real GDP and the GDP deflator in 2020 and 2021, taking 2019 as the base year. Using the GDP deflator, measure the inflation rate in the economy between 2019 and 2020, and also between 2020 and 2021. (B) A typical household consumes 3 units of A, 3 units of B and 2 units of C in 2019. Using 2019 as the base year, compute the CPI for 2020 and 2021 and the inflation rate between 2019 and 2020, and also between 2020 and 2021. Are the inflation rates computed from (b) the same as those computed from (a)? Why?
he following table shows the outputs and prices of three products A, B and C by a small economy in 2019, 2020 and 2021. 2019 2020 2021 Product price qty price qty price qty A $4 50 $5 55 $6 60 B $3 40 $5 42 $8 45 C $2 20 $3 25 $4 28 (A) Compute the nominal GDP, the real GDP and the GDP deflator in 2020 and 2021, taking 2019 as the base year. Using the GDP deflator, measure the inflation rate in the economy between 2019 and 2020, and also between 2020 and 2021. (B) A typical household consumes 3 units of A, 3 units of B and 2 units of C in 2019. Using 2019 as the base year, compute the CPI for 2020 and 2021 and the inflation rate between 2019 and 2020, and also between 2020 and 2021. Are the inflation rates computed from (b) the same as those computed from (a)? Why?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
The following table shows the outputs and prices of three products A, B and C by a small economy in 2019, 2020 and 2021.
| 2019 | 2020 | 2021 | ||||
| Product | qty | price | qty | price | qty | |
| A | $4 | 50 | $5 | 55 | $6 | 60 |
| B | $3 | 40 | $5 | 42 | $8 | 45 |
| C | $2 | 20 | $3 | 25 | $4 | 28 |
- (A) Compute the nominal
GDP , the real GDP and the GDP deflator in 2020 and 2021, taking 2019 as the base year. Using the GDP deflator, measure the inflation rate in the economy between 2019 and 2020, and also between 2020 and 2021. - (B) A typical household consumes 3 units of A, 3 units of B and 2 units of C in 2019. Using 2019 as the base year, compute the
CPI for 2020 and 2021 and the inflation rate between 2019 and 2020, and also between 2020 and 2021. Are the inflation rates computed from (b) the same as those computed from (a)? Why?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education