Question

How do you solve these GDP questions?

Question 8 Not yet answed erasers. Which one is the value nearest to an inflation rate by CPI between 2010 and 2011 using 2010 as a base year? Points out of 1.00 P Flag question Suppose the following economy produced pencils and erasers in 2010 and 2011 according to the following table. CPI basket in this economy consists of 5 pencils and 7 2010 P20102011 P2011 Pencils 5 10 8 30 Erasers 7 20 15 40 Select one: a. 100 b. 115 c. 125 o d. 135 Question 9 Suppose the following economy produced pencils and erasers in 2010 and 2011 according to the following table. CPI basket in this economy consists of 5 pencils and 7 erasers. Which one is the value nearest to an inflation rate by GDP deflator between 2010 and 2011 using 2011 as a base year? Not yet answered Points out of 1.00 P Flag question 201 P2012011 P2011 8 Pencils 5 Erasers 7 20 15 40 10 30 Select one a. 125 O b. 140 O c. 130 o d. 100

Answer 1

Q8. Option C

	2010		2011
	Q	P	Q	P
Pencils	5	10	8	30
Erasers	7	20	15	40

		CPI 2010
Nominal GDP for 2010	190
Real GDP for 2010	190	100
		CPI 2010
Nominal GDP for 2011	840
Real GDP for 2011	380	221.052632

For Real GDP of 2011 multiply 2011 quantity by prices of 2010

CPI = Nominal/Real GDP

Inflation = (CPI of 2011 -CPI of 2010)/CPI of 2010 =((221.05-100)/100)*100 = 121.05

Q9 Option a

		CPI 2010
Nominal GDP for 2010	190
Real GDP for 2010	430	44.19
		CPI 2010
Nominal GDP for 2011	840
Real GDP for 2011	840	100

For Real GDP of 2010 multiply 2010 quantity by prices of 2011

Inflation =((100-44.19/44.19)*100 = 126.32