How do the calculated values for inflation, the real GDP growth rate and nominal GDP growth rate relate to each other?
A. They are related in that the growth rate in real GDP plus inflation rate equals (approximately) the growth rate in nominal GDP.
B.They are related in that the growth rate in real GDP minus inflation rate equals (approximately) the growth rate in nominal GDP.
C.They are related in that the growth rate in nominal GDP plus inflation rate equals (approximately) the growth rate in real GDP.
D.Inflation, the real GDP growth rate and nominal GDP growth rate are not directly related to each other.
Answer : The answer is option A.
The growth rate of real GDP and nominal GDP and inflation rate are related with each other. From economic theory we get that,
Growth rate of Nominal GDP = Growth rate of Real GDP + Inflation rate.
Therefore, option A is correct.
How do the calculated values for inflation, the real GDP growth rate and nominal GDP growth...
Reference equation: Real GDP per capita growth rate Nominal GDP per capita growth rate - Inflation rate - Population growth rate This equation is an approximation of the exact rate of growth of GDP per capita, and so it results in some errors when calculating this rate. However, the simplified equation both is easy to use and results in small error terms when inflation, nominal GDP growth, and population growth are low, and so it is a useful approximation. The...
Reference equation: Real GDP per capita growth rate = Nominal GDP per capita growth rate-inflation rate-Population growth rate This equation is an approximation of the exact rate of growth of GDP per capita, and so it results in some errors when caloulating this rate. However, the smplified equation is both easy to use and results in small error terms when inflation, nominal GDP growth, and population growth are low, and so it is a useful approximation. The table below lists...
Reference equation: Real GDP per capita growth rate = Nominal GDP per capita growth rate - Inflation rate - Population growth rateThis equation is an approximation of the exact rate of growth of GDP per capita, and so it results in some errors when calculating this rate. However, the simplified equation both is easy to use and results in small error terms when inflation, nominal GDP growth, and population growth are low, and so it is a useful approximation. The...
1- The nominal GDP growth rate is 10% with an inflation rate of 6% and a population growth rate of 1%. Thus, the real growth rate of GDP per capita is: 7%. 5%. 3%. 17%. 2- If real GDP per capita for Schruteland grew from $5 trillion to $10 trillion between 1980 and 2015, then which of the following was the approximate annual growth rate? 35% 2% 4% 6%
Based on the table below, calculate nominal GDP, real GDP, the GDP deflator, and the inflation rate in each year and fill in the missing parts of the table. Use 2014 as the base year. Instructions: Round nominal and real GDP values to two decimal places. Round GDP deflator and inflation rate values to the nearest whole number.
Based on the table below, calculate nominal GDP, real GDP, the GDP deflator, and the inflation rate in each year and fill in the missing parts of the table. Use 2014 as the base year. Instructions: Round nominal and real GDP values to two decimal places. Round GDP deflator and inflation rate values to the nearest whole number. Price of Quantity of Price of orange ($) Quantity of oranges 700 beach balls beach ball Nominal GDP ($) Real GDP ($)...
Fill in the blanks in the table below. Nominal GDP growth Inflation Real GDP growth per capita 0% 5% 1% Country Svea Bonifay Chaires Drifton Estiffanulga Population growth 3% 1% 1% 1% L % % 3% 0% 6% -1% 2% 4% 8% T 3%
GDP Inflation Deflator Rate YEAR CPI GDP %GDP | Real GDP | %RGDP (%CPI) |(2015-100) 2012 231.2 95.43 1619 2013 234.72 97.11 16785 2014 236.27 98.94 17522 2015 237.83 100.00 18219 2016 242.7 01.09 1870 2017 247.91 103.02 19485 1. Calculate the annual inflation rate using the CPI. 2. Calculate the annual GDP growth rate using the GDP. 3. Explain how the inflation rate and the GDP growth have been moved. 4. Calculate the real GDP using GDP deflator by...
Fill in the blanks in the table below. Country Inflation Nominal GDP growth 4% Real GDP growth per capita -1% Svea 3% Population growth 2% 1% 3% 1% % Bonifay Chaires Drifton Estiffanulga 3% 0% 6% -1% 2% 4% 8% % 4%
The real interest rate A. is equal to the nominal interest rate minus the inflation rate. B. is the interest rate that adjusts GDP for changes in prices. C. is equal to the inflation rate minus the nominal interest rate. D. is the interest rate that is quoted on a financial debt and a firm's assets.