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Is this rate an accurate reflection of economic growth? Why or why not? 8.

Is this rate an accurate reflection of economic growth? Why or why not? 8.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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2011 Quantity Price Total Value 1. Cars 50 $20,000 2. Computers 200 $3,000 3. What is 2011's nominal GDP? 2012 Quantity Price Total Value 4. Cars 70 $23,000 5. Computers 250 $3,500 6. What is 2012's nominal GDP? 7. Calculate the rate of growth of nominal GDP. Is this rate an accurate reflection of economic growth? Why or why not? 8. To see true growth, we need to recalculate nominal GDP into real GDP. To do this, recalculate both GDP for both years using 2012 as your base year. 9. 2011 real GDP (using 2012's prices) 10. 2012 real GDP (using 2012's prices) 11. What is real economic growth for this nation? 12. What do you notice about real and nominal GDP in the base year?
Transcribed Image Text:2011 Quantity Price Total Value 1. Cars 50 $20,000 2. Computers 200 $3,000 3. What is 2011's nominal GDP? 2012 Quantity Price Total Value 4. Cars 70 $23,000 5. Computers 250 $3,500 6. What is 2012's nominal GDP? 7. Calculate the rate of growth of nominal GDP. Is this rate an accurate reflection of economic growth? Why or why not? 8. To see true growth, we need to recalculate nominal GDP into real GDP. To do this, recalculate both GDP for both years using 2012 as your base year. 9. 2011 real GDP (using 2012's prices) 10. 2012 real GDP (using 2012's prices) 11. What is real economic growth for this nation? 12. What do you notice about real and nominal GDP in the base year?
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