(a) Calculate nominal GDP for the years 2019 and 2020.(b) Using 2018 as the base year, calculate real GDP for the years 2019 and 2020.(c) Calculate the growth rates in 2020 for both nominal GDP and real GDP.(d) Outline the strengths and weaknesses of using GDP to measure standards of living. Please label which part of the question (a, b, c, or d) that you are answering.A small economy produces only two goods: bananas and computers. The prices and quantitiesof these goods for the years 2018, 2019 and 2020 are given below. Show all working wherepossible and express answers to 2 decimal points.YearPrice of BananasQuantity ofBananas (kgs)Price ofQuantity of(per kg)ComputersComputers2018$4.10947$331.00552019$ 4.20970$335.00572020$ 4.30990$340.0060

Year Nominal GDP( Σ current price x current quantity) 2018 $4.10 x 947 + $331.00 x 55 = 22087.7…

ing 2018 as the base year, calculate real GDP for the years 2019 and 2020. culate the growth rates in 2020 for both nominal GDP and real GDP. tline the strengths and weaknesses of using GDP to measure ctandarda of luin

ing 2018 as the base year, calculate real GDP for the years 2019 and 2020. culate the growth rates in 2020 for both nominal GDP and real GDP. tline the strengths and weaknesses of using GDP to measure ctandarda of luin

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Economic Growth

It means the rise in the manufacturing levels of a country’s products/services over a while. It is calculated in terms of the real income of the people of the country. When the production of products/services begins, the manufacturers will hire employees, which in turn raises the income of the people and it will also raise the buying power, this eventually leads to the circulation of money that directly helps in the increase in the Gross Domestic Product (GDP). Thus, GDP is calculated by economists to calculate the growth in the country.

Question

(a) Calculate nominal GDP for the years 2019 and 2020.
(b) Using 2018 as the base year, calculate real GDP for the years 2019 and 2020.
(c) Calculate the growth rates in 2020 for both nominal GDP and real GDP.
(d) Outline the strengths and weaknesses of using GDP to measure standards of living.

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