### Nominal and Real GDP AnalysisThe following table provides the nominal and real GDP for an economy over two years. This data is crucial for understanding changes in the economy's overall output and the price level of goods and services.| | Year 1 | Year 2 ||----------------|---------|---------|| **Nominal GDP**| 1430.0 | 1820.0 || **Real GDP** | 1300.0 | 1560.0 |Based on the table:- **GDP Deflator Calculation for Year 2:** - The GDP deflator can be calculated using the formula: \[ \text{GDP Deflator} = \left( \frac{\text{Nominal GDP}}{\text{Real GDP}} \right) \times 100 \] - Using the values from Year 2: \[ \text{GDP Deflator} = \left( \frac{1820.0}{1560.0} \right) \times 100 = 116.7 \] - Therefore, the GDP deflator in Year 2 is **116.7**.- **Inflation Rate Calculation between Year 1 and Year 2:** - The inflation rate can be calculated using the GDP deflator values for both years with the formula: \[ \text{Inflation Rate} = \left( \frac{\text{GDP Deflator in Year 2} - \text{GDP Deflator in Year 1}}{\text{GDP Deflator in Year 1}} \right) \times 100 \] - First, calculate the GDP deflator for Year 1 using the given data: \[ \text{GDP Deflator} (Year 1) = \left( \frac{1430.0}{1300.0} \right) \times 100 = 110.0 \] - Now, using the GDP deflator values for Year 1 and Year 2: \[ \text{Inflation Rate} = \left( \frac{116.7 - 110.0}{110.0} \right) \times 100 \approx 6.1\% \] - Therefore, the inflation rate between Year 1 and Year

The value of the GDP deflator in the country is the ratio of the Nominal GDP and Real GDP during a…

The following table gives nominal and real GDP for an economy for two years. Based on the table, in Year 2, the value of the GDP deflator is Nominal GDP Real GDP Year 1 1430.0 1,300 (Round your answer to one decimal place.) The inflation rate between Year 1 and Year 2 is%. (Round your answer to one decimal place.) Year 2 1820.0 1560.0

The following table gives nominal and real GDP for an economy for two years. Based on the table, in Year 2, the value of the GDP deflator is Nominal GDP Real GDP Year 1 1430.0 1,300 (Round your answer to one decimal place.) The inflation rate between Year 1 and Year 2 is%. (Round your answer to one decimal place.) Year 2 1820.0 1560.0

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter23: Measuring A Nation's Income

Section: Chapter Questions

Problem 4PA

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Question 1. FTable 1: Quantity Produced and Price of Good Price of an automobile Quantity of automobile produced 100 Price of a loaf of bread Quantity of breads produced Year 2000 Year 2010 $60,000 120 $20 400,000 Suppose an economy produces and consumes only bread and automobiles. The table above includes data for two different years. Using the year 2000 as the base year, compute the following statistics for each year: nominal GDP, real GDP, GDP price deflator, and the CPI. |S50,000 $10 500,000
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M10
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