The table below is extracted from Happyland Republic, Bureau of Statistics records for 2019-2020. Use the information in this table to answer the questions that follow. Items Base year 2019 2020 Production Price Production Price Used cloth (units) 4,000 50.00 5,000 60.00 Components used tractor factory production (units) 8,000
The table below is extracted from Happyland Republic, Bureau of Statistics records for 2019-2020. Use the information in this table to answer the questions that follow.
|
Items |
Base year 2019 |
2020 |
|
|
|
|
Production |
Price |
Production |
Price |
|
Used cloth (units) |
4,000 |
50.00 |
5,000 |
60.00 |
|
Components used tractor factory production (units) |
8,000 |
500.00 |
11,000 |
1,200.00 |
|
Cloth (units) |
8,000 |
25.00 |
12,000 |
30.00 |
|
Beef gifts during cultural festival (Kg) |
1,500 |
2.00 |
1,700 |
3.00 |
|
Milk (litres) |
5,000 |
1.30 |
7,000 |
2.50 |
|
Computers (Units) |
2,000 |
500.00 |
2,500 |
600.00 |
|
Printers (Units) |
500 |
300.00 |
400 |
355.00 |
|
Raw materials for car assembling plant (Units) |
4,500 |
250.00 |
4,450 |
300.00 |
- Calculate Happyland Republic’s nominal GDP, real GDP in 2020. Also, calculate the GDP deflator if 2019 is used as the base year.
ANSWER:
Double counting must be avoided when measuring GDP. State and examine four (4) transactions that are excluded from GDP to avoid overstating the size of the economy of a nation.
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