Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 7, Problem 4WNG
To determine
Estimate the value of Real
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In year 1 and year 2, there are two products produced in a given economy: computers and bread. Suppose that there are no intermediate goods. In year 1, 20 computers are produced and sold at $1600 each, and in year 2,
28 computers are produced and sold at $2880 each. In year 1, 20,000 loaves of bread are sold for $4 each, and in year 2, 26,000 loaves of bread are sold for $4.40 each.
a. Nominal GDP in year 1 is $ and nominal GDP in year 2 is $ . (Round your responses to the nearest integer as needed.)
b. Calculate real GDP in each year and the percentage increase in real GDP from year 1 to year 2 by using year 1 as the base year. Next, do the same calculations by using the chain-weighting method.
Using year 1 as the base year, real GDP in year 1 is $,
real GDP in year 2 is $
and the percentage increase in real GDP from year 1 to year 2 is %. (Round responses for real GDP to the nearest integer as needed,
and round your response for the percentage increase to three decimal places as…
In year 1 and year 2, there are two products produced in a given economy, computers and bread. Suppose that there are no intermediate goods. In year 1, 20 computers are produced and sold at $1,000 each, and in year 2, 25 computers are sold at $1,500 each. In year 1, 10,000 loaves of bread are sold for $1.00 each, and in year 2, 12,000 loaves of bread are sold for $1.10 each.
(a) Calculate nominal GDP in each year.
(b) Calculate real GDP in each year, and the percentage increase in real GDP from year 1 to year 2 using year 1 as the base year. Next, do the same calculations using the chain-weighting method.
(c) Calculate the implicit GDP price deflator and the percentage inflation rate from year 1 to year 2 using year 1 as the base year. Next, do the same calculations using the chain-weighting method.
Consider an economy that produces only chocolate bars. In year 1, the quantity produced is 3 bars and the price is $4. In year 2, the quantity produced is 4 bars and the price is $5. In year 3, the quantity produced is 5 bars and the price is $6.
Chapter 7 Solutions
Economics (MindTap Course List)
Ch. 7.1 - Prob. 1STCh. 7.1 - Prob. 2STCh. 7.2 - Prob. 1STCh. 7.2 - Prob. 2STCh. 7.2 - Prob. 3STCh. 7.4 - Prob. 1STCh. 7.4 - Prob. 2STCh. 7.4 - Prob. 3STCh. 7 - Prob. 1QPCh. 7 - Prob. 2QP
Ch. 7 - Prob. 3QPCh. 7 - Prob. 4QPCh. 7 - Prob. 5QPCh. 7 - Prob. 6QPCh. 7 - Prob. 7QPCh. 7 - Prob. 8QPCh. 7 - Prob. 9QPCh. 7 - Prob. 10QPCh. 7 - Prob. 11QPCh. 7 - Prob. 12QPCh. 7 - Prob. 13QPCh. 7 - Prob. 14QPCh. 7 - Prob. 1WNGCh. 7 - Prob. 2WNGCh. 7 - Prob. 3WNGCh. 7 - Prob. 4WNGCh. 7 - Prob. 5WNGCh. 7 - Prob. 6WNGCh. 7 - Prob. 7WNGCh. 7 - Prob. 8WNGCh. 7 - Prob. 9WNGCh. 7 - Prob. 10WNGCh. 7 - Prob. 11WNG
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- explain how to get these answersarrow_forwardAssume an economy in which only broccoli and cauliflower are produced. In year 1, 600 million kilograms of broccoli are produced and consumed and its price is $0.70 per kilogram, while 750 million kilograms of cauliflower are produced and consumed and its price is $0.90 per kilogram. In year 2, 650 million kilograms of broccoli are produced and consumed and its price is $0.75 per kilogram, while 700 million kilograms of cauliflower are produced and its price is $1.10 per kilogram. a. Using year 1 as the base year, the GDP price deflator in year 1 is and the GDP price deflator in year 2 is (Round your responses to two decimal places as needed.) Based on these results for the GDP price deflator, the rate of inflation between years 1 and 2 is %. (Round your response to two decimal places as needed.) b. Using year 1 as the base year, the CPI in year 1 is and the CPI in year 2 is (Round your responses to two decimal places as needed.) Based on these results for CPI, the CPI rate of…arrow_forwardSuppose that in the nation state of Craiglandia there are 2 final goods produced in the economy – food and clothing. Suppose the economy produces 10 units of food and 5 units of clothing in 2000 (the base year), and 10 units of food and 10 units of clothing in 2015. Further suppose the price of food was $2.00 per unit in 2000, and $3.00 per unit in 2015; whereas the price of clothing was $2.00 in 2000 and $2.00 in year 2015. What was the nominal GDP for Craiglandia in 2015? What was the real GDP for Craiglandia in 2015? The GDP deflator for Craiglandia, for 2015, is _______; and it follows that Craiglandia experienced _______between 2000 and 2015.arrow_forward
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