Question

23) Suppose in current dollar terms, GDP increased by approximately 7 percent between one pet likely? and the next, but real GDP fell by 2 percent. Which one of the following explanations is im A) Prices fell by 9 percent B) Prices increased by 9 percent C) Prices fell by 2 percent. D) Output rose by 2 percent. E) Prices increased by 7 percent. ulse the table belous to answer the foloving questions Table 20.2.5 Data From Southton Price (dollars) ty(number of items) Item Rubber Ducks 1.00 Beach Towels 9.00 Base Year Current Year Base Year Current Year 6.00 12 14 24) Refer to Table 20.2.5. From the data in the table, compute Southton' 24) s nominal GDP in the current year. A) $209 B) 5226 C) $208 D) $197 E) It cannot be calculated given the data. Ise the table belote to anstoer the following questions Table 20.2.6 There are only two goods in this economy Price Base Year Current Year (dollars) (dollars) Base Year Current Year 70,000 75,000 100 1.80 25,000 18,000 Computer Disks 25) Refer to Table 20.2.6. Consider the data in this table. What is current real GDP in terms of base-year 25) prices? A) $93,000 B) $192,000 C) $189,900 D) $95,000 E) None of the above 26) Choose the correct statement. 26) A) Nominal GDP is just a more precise name for real GDP B) Nominal GDP is just a more precise name for GDIP C) We measure the change in production by comparing nominal GDP in one year with real GDP in the previous year D) When nominal GDP increases, real GDP decreases E) Nominal GDP and real GDP both increase when the average level of prices increase.

Answer 1

23) if gdp increases by 7% and real gdp decreases by 2% then it simply means prices has increased by 9%. it is so because real gdp is the difference between nominal gdp and inflation.

24) here in the table according to the data given, nominal gdp with current year price will be 209$. obtained simply by multiplying the current year quantity with current year price and then by summing the both value.

25) from the data given in the table we can obtain the real gdp with base year price and quantity as 93000$ and it can be obtained by simply multipling the current year quantity with the base year price and then summing them up.

26) nominal gdp is just a more precise name for gdp.