Given below is the the real GDP and potential GDP for the fictitious country "Alpha." a. Use the date to determine the the year-to-year growth rates of real GDP, the output gap as a percentage of potential GDP and state whether the gap is a recessionary gap or an expansionary gap. Instructions: Enter your responses as a percentage rounded to two decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. YearReal GDPPotential GDPReal GDP growthOutput gapType of gap2005$17,500$17,300 % (Click to select) expansionary recessionary 2006$18,200$17,800%% (Click to select) expansionary recessionary 2007$18,500$18,300%% (Click to select) recessionary expansionary 2008$18,400$18,800%% (Click to select) expansionary recessionary 2009$18,200$19,300%% (Click to select) recessionary expansionary 2010$18,600$19,700%% (Click to select) recessionary expansionary 2011$19,200$20,100%% (Click to select) expansionary recessionary 2012$19,900$20,500%% (Click to select) recessionary expansionary

Real GDP growth rate can be calculated by using the following formula: Real GDP growth rate=Real GDP growth1-Real GDP growth0Real GDP growth0×100 2006 real GDP can be calculated as follows: Real GDP growth rate=18,200-17,50017,500×100=4%Output gap can be calculated by using the following formula: Output gap=Real GDP-Potential GDPPotential GDP×100 2005 Output can be calculated by using the above method as follows: Output gap=17,500-17,30017,300×100=1.16%Table -1 shows the real GDP growth and output gap and this can be calculated by using the above method as follows:

Answered: Use the date to determine the the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Given below is the the real GDP and potential GDP for the fictitious country "Alpha."

a. Use the date to determine the the year-to-year growth rates of real GDP, the output gap as a percentage of potential GDP and state whether the gap is a recessionary gap or an expansionary gap.

Instructions: Enter your responses as a percentage rounded to two decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers.

Year	Real GDP	Potential GDP	Real GDP growth	Output gap	Type of gap
2005	$17,500	$17,300		%	(Click to select) expansionary recessionary
2006	$18,200	$17,800	%	%	(Click to select) expansionary recessionary
2007	$18,500	$18,300	%	%	(Click to select) recessionary expansionary
2008	$18,400	$18,800	%	%	(Click to select) expansionary recessionary
2009	$18,200	$19,300	%	%	(Click to select) recessionary expansionary
2010	$18,600	$19,700	%	%	(Click to select) recessionary expansionary
2011	$19,200	$20,100	%	%	(Click to select) expansionary recessionary
2012	$19,900	$20,500	%	%	(Click to select) recessionary expansionary

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