The country of Huskies produces two goods: footballs and basketballs. Below is a table showing prices and quantities of output for three years:| Year | Price of Footballs | Quantity of Footballs | Price of Basketballs | Quantity of Basketballs ||-----------|--------------------|-----------------------|----------------------|-------------------------|| Year 2016 | $10 | 120 | $12 | 200 || Year 2017 | $12 | 200 | $15 | 300 || Year 2018 | $14 | 180 | $18 | 275 |a) Calculate nominal GDP for three years b) Calculate real GDP using 2016 as a base year c) Calculate GDP deflator for these three years To solve these problems:### a) Calculating Nominal GDP for Three YearsNominal GDP is calculated as the sum of the products of the prices and the quantities of all goods produced.**Year 2016:** Nominal GDP = (Price of Footballs x Quantity of Footballs) + (Price of Basketballs x Quantity of Basketballs) = (10 x 120) + (12 x 200) = 1200 + 2400 = $3600**Year 2017:** Nominal GDP = (12 x 200) + (15 x 300) = 2400 + 4500 = $6900**Year 2018:** Nominal GDP = (14 x 180) + (18 x 275) = 2520 + 4950 = $7470### b) Calculating Real GDP Using 2016 as a Base YearReal GDP uses constant prices from the base year (2016) to measure the actual growth in output.**Year 2016:** Real GDP = Nominal GDP (since it is the base year) = $3600**Year 2017:** Real GDP = (Price of Footballs in 2016 x Quantity of Footballs in 2017) + (Price of Basketballs in 2016 x Quantity of Basketballs in 2017) = (10 x 200) + (12 x 300) = 2000 + 3600 = $5600**Year 2018:** Real

here we calculate the Real GDP , Nominal GDP and GDP Deflator by using the given data so calculation…

The country of Huskies produces two goods: footballs and basketballs. Below is a table showing prices and quantities of output for three years: Quantity of Footballs Quantity of Basketballs Price of Price of Year Footballs Basketballs Year 2016 $10 120 $12 200 Year 2017 12 200 15 300 Year 2018 14 180 18 275 a) Calculate nominal GDP for three b) Calculate real GDP using 2016 as a base year c) Calculate GDP deflator for these three years years

The country of Huskies produces two goods: footballs and basketballs. Below is a table showing prices and quantities of output for three years: Quantity of Footballs Quantity of Basketballs Price of Price of Year Footballs Basketballs Year 2016 $10 120 $12 200 Year 2017 12 200 15 300 Year 2018 14 180 18 275 a) Calculate nominal GDP for three b) Calculate real GDP using 2016 as a base year c) Calculate GDP deflator for these three years years

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter2: Economic Tools And Economic Systems

Section: Chapter Questions

Problem 2.3P

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