The data below are from the economies of Ishgandar and Nonburmia. Ishgandar Nonburmia Year Population GDP Deflator Nominal GDP Year Population GDP Deflator Nominal GDP 1 5 100 $200 1 10 100 $300 2 5 125 $375 2 10 110 $440 (e) Assume that in Year 1 Nonburmia is operating inside its production possibilities curve and that Nonburmia’s production possibilities curve remains unchanged from Year 1 to Year 2. As a result of the change in real GDP from Year 1 to Year 2, does Nonburmia’s economy move closer to or farther away from its production possibilities curve? Explain using numbers for real GDP and state what will happen to cyclical unemployment in the short run.
The data below are from the economies of Ishgandar and Nonburmia. Ishgandar Nonburmia Year Population GDP Deflator Nominal GDP Year Population GDP Deflator Nominal GDP 1 5 100 $200 1 10 100 $300 2 5 125 $375 2 10 110 $440 (e) Assume that in Year 1 Nonburmia is operating inside its production possibilities curve and that Nonburmia’s production possibilities curve remains unchanged from Year 1 to Year 2. As a result of the change in real GDP from Year 1 to Year 2, does Nonburmia’s economy move closer to or farther away from its production possibilities curve? Explain using numbers for real GDP and state what will happen to cyclical unemployment in the short run.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The data below are from the economies of Ishgandar and Nonburmia.
| Ishgandar | Nonburmia | |||||||
| Year | Population |
Deflator |
Nominal GDP |
Year | Population |
GDP Deflator |
Nominal GDP |
|
| 1 | 5 | 100 | $200 | 1 | 10 | 100 | $300 | |
| 2 | 5 | 125 | $375 | 2 | 10 | 110 | $440 |
(e) Assume that in Year 1 Nonburmia is operating inside its
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