The remote island of Aquamotor Reef produces only cars and fish. The table gives the quantitiesproduced and market prices in 2020 and in 2021.ItemCarsFish2020QuantityPrice128,600Nominal GDP in 2020.$30,000$5Nominal GDP in 2021.Real GDP in 2020.Real GDP in 2021.2021Quantity139,000Price$32,000$6What is the economic growth rate when valued at 2020 prices?What is the economic growth rate when valued at 2021 prices? (Clue: the first step is to revalue real GDPin both years with 2021 as base year.)

The real economic growth rate, also called real GDP growth rate, determines economic growth, as…

The remote island of Aquamotor Reef produces only cars and fish. The table gives the quantities produced and market prices in 2020 and in 2021. Item Cars Fish 2020 Quantity Price 12 8,600 Nominal GDP in 2020. $30,000 $5 Nominal GDP in 2021. Real GDP in 2020. Real GDP in 2021. What is th 2021 Quantity 13 9,000 Price What is the economic growth rate when valued at 2020 prices? 2021 $32,000 $6 LCDD

The remote island of Aquamotor Reef produces only cars and fish. The table gives the quantities produced and market prices in 2020 and in 2021. Item Cars Fish 2020 Quantity Price 12 8,600 Nominal GDP in 2020. $30,000 $5 Nominal GDP in 2021. Real GDP in 2020. Real GDP in 2021. What is th 2021 Quantity 13 9,000 Price What is the economic growth rate when valued at 2020 prices? 2021 $32,000 $6 LCDD

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The remote island of Aquamotor Reef produces only cars and fish. The table gives the quantities
produced and market prices in 2020 and in 2021.
Item
Cars
Fish
2020
Quantity
Price
12
8,600
Nominal GDP in 2020.
$30,000
$5
Nominal GDP in 2021.
Real GDP in 2020.
Real GDP in 2021.
2021
Quantity
13
9,000
Price
$32,000
$6
What is the economic growth rate when valued at 2020 prices?
What is the economic growth rate when valued at 2021 prices? (Clue: the first step is to revalue real GDP
in both years with 2021 as base year.)

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