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.)

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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  1. 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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