### Economic Data for Five-Year PeriodBelow is a table containing data related to the output and price of a single product over a span of five years:| Year | Units of Output | Price Per Unit ||------|-----------------|----------------|| 1 | 3 | $3 || 2 | 4 | $4 || 3 | 6 | $5 || 4 | 7 | $7 || 5 | 8 | $8 |#### Instructions:Refer to the above data for a hypothetical economy that produces only one product. Assume that year 3 is the base year. Output and price data for the five-year period are provided. Use this information to address the following question:**Question:**Determine the Real GDP for year 5 using year 3 as the base year.**Options:**1. $642. $403. $1604. $49

Real GDP is defined as the market value of goods and services produced within an economy and counted…

Answered: Units of Price Per Year Output 3 Unit 1…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If Gdp deflator is equal at 120 it means that : 1- stagflation 2- deflation 3- inflation 4- stability
(a) The following table shows the outputs and prices of three products produced by an economy in 2018, 2019 and 2020. (i) Measure the nominal GDP, the real GDP and the GDP deflator in 2019 and 2020, taking 2018 as the base year.(ii) Using the GDP deflator, measure the inflation rate in the economy between 2018 and 2019, and also between 2019 and 2020. (b) Assume all household consumption items are locally produced as shown in the table in Question (a). A typical household in the economy consumes 5 units of rice, 4 units of shirt and 2 units of shoes in 2018. Using 2018 as the base year, measure the CPI for 2019 and 2020 and the inflation rate between 2018 and 2019, and also between 2019 and 2020. Explain why the inflation rate is different from those computed from (a)(ii).
Consider the data in the following table, which represents the total production of the country Byzantium, a country that produces only consumer goods. Table 1: Byzantium 2018 2019 2020 Quantity of Y 100 105 103 Quantity of X 5 3 1 Price of Y $5 $5 $5 Price of X $100 $105 $110 1. Calculate the nominal GDP for all three years ( 2. Calculate real GDP for all three years, using 2018 as the base year 3. Calculate the GDP deflator, using 2018 as the base year. Identify whether there was inflation from the previous year (*
Product Quantity Price Year 1 Cereal 1,000 $1.00 Beef 700 $2.00 Doughnuts 600 $0.50 Year 2 Cereal 1,400 $1.10 Beef 600 $2.50 Doughnuts 500 $0.75 If year 1 is the base year, what is the GDP delflator in year 2?
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Production Prices Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Good X 54 78 78 $1.2 $1.5 $1.2 Good Y 69 86 111 $0.9 $0.8 $0.8 Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base year, what is the value for this economy's GDP deflator in year 1?
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We Suppose U.S. nominal GDP increases from one year to the next year. conclude that U.S. production of goods and services has increased because: Prices have decreased from one year to the next Prices have increased as well from one year to the next We do not know whether prices have changed from one year to the next The best measure for determining growth in output between two periods is real GDP
You are given the following: Year Quantity of Cars Price of Cars Quantity of Buses Price of Buses 2013 5 million $20,000 1 million $100,000 2014 5.1 million $22,000 1.2 million $102,000 Base Year = 2013 2a. Calculate nominal GDP for 2013. Nominal GDP for 2013 = (5 million × $20,000) + (1 million × $100,000) = $100,000 million + $100,000 million = $200,000 million 2b. Calculate nominal GDP for 2014. Nominal GDP for 2014 = (5.1 million × $22,000) + (1.2 million × $102,000) = $112,200 million + $122,400 million = $234,600 million. 2c. Calculate real GDP for 2014. The real GDP for 2014 will be calculated as:- Real GDP for 2014 = (5.1 million × $20,000) + (1.2 million × $100,000) = $102,000 million + $120,000 million = $222,000 million. 2d. Calculate the GDP Deflator to the nearest tenth for 2014. 2e. What does your previous number mean? 2f. Calculate the CPI to the nearest tenth for 2014. (Use 2013 as the base year.)
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