Homework Answers
Nominal GDP is the GDP which is measured in current price levels , so it does not account for inflation from one year to another . Even though output may be same from year to year , nominal GDP will be different if prices are different . Real GDP , on the other hand , adjusts for inflation and is better measure of economic growth . Real GDP is calculated using base year prices or unchanging prices . So it reflects changes in GDP level or growth of output .
GDP Deflator = Nominal GDP / Real GDP * 100
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26. Why is Nominal GDP a problematic measure? How does it influence how Real GDP is...
a) Explain why the traditional fixed-weighted measure of real GDP is preferred to nominal GDP for...
a) Explain why the traditional fixed-weighted measure of real GDP is preferred to nominal GDP for assessing changes in an economy's production over time. b) Explain why a chain-weighted measure of real GDP is preferred to the traditional fixed-weighted measure of real GDP.
2. Why do economists believe that real GDP is a better measure of production over nominal...
2. Why do economists believe that real GDP is a better measure of production over nominal GDP?
26. The velocity of money is: a. nominal GDP divided by the nominal quantity of money b. nominal GDP divided by the real quantity of money c. real GDP divided by the real quantity of money d. real GD...
26. The velocity of money is: a. nominal GDP divided by the nominal quantity of money b. nominal GDP divided by the real quantity of money c. real GDP divided by the real quantity of money d. real GDP divided by the nominal quantity of money
We were unable to transcribe this imageWhy is real GDP a more accurate measure of an...
We were unable to transcribe this imageWhy is real GDP a more accurate measure of an economy's production than nominal GDP? O Real GDP does not include the value of intermediate goods and services, but nominal GDP does. Real GDP is not influenced by price changes, but nominal GDP is. Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes.
How do the calculated values for inflation, the real GDP growth rate and nominal GDP growth...
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...
7. Discuss why the nominal GDP per capita is a good measure of a countries economic...
7. Discuss why the nominal GDP per capita is a good measure of a countries economic well being and why it is a poor measure. a. (5 points) Why is the nominal GDP per capita a good measure? b. (5 points) Why is the nominal GDP per capita a poor measure?
Real versus nominal GDP Consider a simple economy that produces two goods: pens and envelopes. The...
Real versus nominal GDP Consider a simple economy that produces two goods: pens and envelopes. The following table shows the prices and quantities of the goods over a three-year period. Year Pens Envelopes Price Quantity Price Quantity (Dollars per pen) (Number of pens) (Dollars per envelope) (Number of envelopes) 2018 2 125 3 155 2019 4 135 3 210 2020 2 125 3 165 Use the information from the preceding table to fill in the following table. Year Nominal GDP...
5. Real versus nominal GDP Consider a simple economy that produces two goods: apples and muffins....
5. Real versus nominal GDP Consider a simple economy that produces two goods: apples and muffins. The following table shows the prices and quantities of the goods over a three- year period. Apples Price Quantity (Dollars per apple) (Number of apples) Year 2018 2019 115 Muffins Price Quantity (Dollars per muffin) (Number of muffins) 175 180 160 150 2020 100 Use the information from the preceding table to fill in the following table. Nominal GDP (Dollars) Real GDP (Base year...
decreased/increased -12.5% or 0.1% or 12.5% or 88.9% or 112.5% 5. Real versus nominal GDP Consider...
decreased/increased
-12.5% or 0.1% or 12.5% or 88.9% or 112.5%
5. Real versus nominal GDP Consider a simple economy that produces two goods: pens and erasers. The following table shows the prices and quantities of the goods over a three year period. Pens Erasers Price (Dollars per pen) Quantity (Number of pens) Price (Dollars per eraser) 150 Year 2018 2019 2020 Quantity (Number of erasers) 160 230 165 N 135 110 Use the information from the preceding table to fill...
5. Real versus nominal GDP Consider a simple economy that produces two goods: pens and muffins....
5. Real versus nominal GDP Consider a simple economy that produces two goods: pens and muffins. The following table shows the prices and quantities of the goods over a three-year period. YearPrice (Dollars per pen)Quantity (Number of pens)Price (Dollars per muffin)Quantity (Number of muffins)201811502160201921354230202031104165Use the information from the preceding table to fill in the following table. From 2019 to 2020, nominal GDP _______ , and real GDP _______ .The inflation rate in 2020 was _______ .Why is real GDP a more accurate measure...
a) Explain why the traditional fixed-weighted measure of real GDP is preferred to nominal GDP for assessing changes in an economy's production over time. b) Explain why a chain-weighted measure of real GDP is preferred to the traditional fixed-weighted measure of real GDP.
We were unable to transcribe this imageWhy is real GDP a more accurate measure of an economy's production than nominal GDP? O Real GDP does not include the value of intermediate goods and services, but nominal GDP does. Real GDP is not influenced by price changes, but nominal GDP is. Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes.
5. Real versus nominal GDP Consider a simple economy that produces two goods: apples and muffins. The following table shows the prices and quantities of the goods over a three- year period. Apples Price Quantity (Dollars per apple) (Number of apples) Year 2018 2019 115 Muffins Price Quantity (Dollars per muffin) (Number of muffins) 175 180 160 150 2020 100 Use the information from the preceding table to fill in the following table. Nominal GDP (Dollars) Real GDP (Base year...
decreased/increased
-12.5% or 0.1% or 12.5% or 88.9% or 112.5%
5. Real versus nominal GDP Consider a simple economy that produces two goods: pens and erasers. The following table shows the prices and quantities of the goods over a three year period. Pens Erasers Price (Dollars per pen) Quantity (Number of pens) Price (Dollars per eraser) 150 Year 2018 2019 2020 Quantity (Number of erasers) 160 230 165 N 135 110 Use the information from the preceding table to fill...
5. Real versus nominal GDP Consider a simple economy that produces two goods: pens and muffins. The following table shows the prices and quantities of the goods over a three-year period. YearPrice (Dollars per pen)Quantity (Number of pens)Price (Dollars per muffin)Quantity (Number of muffins)201811502160201921354230202031104165Use the information from the preceding table to fill in the following table. From 2019 to 2020, nominal GDP _______ , and real GDP _______ .The inflation rate in 2020 was _______ .Why is real GDP a more accurate measure...
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