Homework Answers
a) Nominal GDP ( It is the total market value of goods and services produced.)
In current period
4240*1.30+5000*10+1060*100 =161,512
In base period
4240*1+5000*8+1060*100 = 150240
b) Real GDP ( It is an economic measure of value to economic output adjusted for price changes.)
In current period ( At base period prices.)
4240*1+5000*8+1060*100=150240
In Base Period
4240*1+5000*8+1060*100= 150240
c) Inflation
Percentage change in nominal GDP = {(161,512-150240)/150,240}*100= 7.5
Percentage change in real gdp = { 150240-150240/150240)}*100=0
Percentage change in price level (inflation) = percentage change in nominlal GDP - percentage change in Real GDP = 7.5-0 = 7.5
All the best
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