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Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Textbook Question
Chapter 19, Problem 10P
Nominal GDP in Nowhereland in 2018 and 2019 is as follows:
Can you say that the production of goods and services in Nowhereland has increased between 2018 and 2019? Why or why not?
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Nominal GDP in Nowhereland in 2002 and 2003 increased from $4 trillion to $4.8 trillion. Can you say that the production of goods and services in Nowhereland has increased between 2002 and 2003? Why or why not?
According to the Bureau of Economic Analysis, the GDP Deflator for the 3rd Quarter 2021 is +5.7%. The U.S. Bureau of Labor Statistics reported the Consumer Price Index (CPI) as rising 5.4 percent over the last 12 months, not seasonally adjusted. Given this information:
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Can you think of other aspects of well-being that are associated with the rise in women’s labor-force participation? Would it be practical to construct a measure of well-being that includes these aspects?
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- List some of the reasons why economists should not consider GDP an effective measure of the standard of living in a county.arrow_forwardGDP deflator (GDP deflator for year t = nominal GDP for year t divided by the real GDP for year t) is a price index representing the overall price level in the economy. The CPI (the consumer price index) is also a price index representing the overall price level in the economy. Which of the below is best explains why they are different? The GDP deflator does not reflect the prices of exported goods and services, whereas the consumer price index does not reflect the prices of the imported goods and services. The GDP deflator reflects the prices of goods and services bought by producers, whereas the consumer price index reflects the prices of goods and services bought by consumers. The GDP deflator reflects the prices of intermediate goods and services bought by producers, whereas the consumer price index reflects the prices of goods and services bought by consumers.arrow_forwardWhat is a real GDP? Why do economists prefer to use that as a measurement over regular GDP?arrow_forward
- A small nation of ten people idolizes the TV show American Idol. All they produce and consume are karaoke machine and CDs, in the following amounts: i) Using a method similar to the consumer price index, compute the percentage change in the overall price level. Use 2011 as the base year and fix the basket at 1 karaoke machine and 3 CDs. ii) Using a method similar to the GDP deflator, compute the percentage change in the overall price level. Use 2011 as the base year. iii) Is the inflation rate in 2012 the same using the two methods? Explain why or why not?arrow_forwardThe following table contains nominal and real GDP data, in billions of dollars, from the U.S. Bureau of Economic Analysis for 2013 and 2014. The data is listed per quarter, and the real GDP data was calculated using 2009 as the base year. Fill in the columns for the GDP deflator and for the percent increase in price level. (Round your responses to two decimal places!) Quarter Nominal GDP Real GDP GDP Deflator Percent Increase in Price Level (%) 2013 Q1 16,502.40 15,538.40 106.20 ---- 2013 Q2 16,619.20 15,606.60 ? ? 2013 Q3 16,872.30 15,779.90 ? ? 2013 Q4 17,078.30 15,916.20 ? ? 2014 Q1 17,044.00 15,831.70 ? ? 2014 Q2 17,328.20 16,010.40 ? ? 2014 Q3 17,599.80 16,205.60 ? ? 2014 Q4 17,703.70 16,294.70 ? ? Please explain how to solve the empty columns thank you!arrow_forwardAssume that in the year 2010, the US Nominal GDP was $15 trillion, while the GDP deflator was 200. Calculate the US Real GDP for 2010. $30 trillion $300 trillion $7.5 trillion $0.75 trillionarrow_forward
- In Macronesia the GDP deflator for 2006 is 105 ( with 2005 being the base year). If the real GDP in 2006 equals 210 billion, the nominal GDP in 2006is equal to $200 billion. Not enough information given. $220.5 billion. $ 210arrow_forwardGDP is a good and useful measure of general economic activity for each of the following reasons except for which one? (Which one of the following is not either correct or a reason to rely on GDP as a measure of economic activity?) In order to raise the amount of goods and services available in a country, GDP must rise. In order to have a true measure of economic activity, the income of all people needs to be considered, and the value of goods and services for all people must be considered, and GDP considers the income and spending for all people (in the country). The total value of GDP is lower if the distribution of income is lower and less equitable, and is higher if the distribution is higher and more equitable, and this makes GDP a good indicator of aggregate economic activity. In order to raise the income of some people, and have the income of no people go down, GDP must rise. People care about their income, and GDP is a measure of total income.arrow_forwardneed help with this one. Using the data in the table below related to nominal GDP and the chain-weighted price deflators for gross domestic product (e.g., price index for GDP), answer the following questions:arrow_forward
- The participation of women in the Gambian labor force has risen dramatically since 2000. How do you think this rise affected GDP? Now imagine a measure of well-being that includes time spent working in the home and taking leisure. How would the change in this measure of well-being compare to the change in GDP? Can you think of other aspects of well-being that are associated with the rise in women’s labor-force participation? Would it be practical to construct a measure of well-being that includes these aspects?arrow_forwardThe table below shows nominal and real GDP figures for a hypothetical economy. Note that 2018 is the reference year Nominal GDP (current $ billions) Real GDP Year GDP Deflator (2018 $ billions) 218.6 2017 97.466 2018 243.1 2019 255.1 101.340 2020 268.4 260.7 2021 105.447 271.2 Fill in the table, writing out billions of dollars to the first decimal e.g. $1.0 billion and the GDP deflator to three decimal place 100.000.arrow_forwardWhat would happen to measured GDP if more people started hiring workers to do house chores such as cooking and cleaning?arrow_forward
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