Question

GDP deflator Year Nominal GDP Population Size ($ billions (millions 2008 3,275 310 2009 3,400 312 2010 3,350 314 Table L: Economic Data for a Hypothetical Economy 104 107 109 119. Consider the economic data provided for a hypothetical economy in Table L above. What is the real GDP growth rate from 2008-09 for the economy depicted in Table L? (If necessary, at each stage of calculation, round to the nearest 1/100th (0.00).) A. -3.39% B. -3.28% C. -1.47% D. 5.00% E. 0.91% P Product Good X Good Y Table 22 Q, 2008 40 100 Q, 2009 50 110 110 , 2010 80 120 P12 .08 P, 2008 $1.00 $0.50 , 2009 $1.10 $0.80 P, 2010 $1.20 $1.00 120. Refer to Table 22 above. Assume that this economy produces only two goods Good X and Good Y. Using 2009 as the base year, the value for this economy's real GDP in year 2008 is: A. $55.88 B. $90 C. $105 D. $124 E. Not calculable because the base year is before the year for which real GDP is to calculated. Year Nominal GDP Population Size GDP deflator ($ billions) (billions) 2008 3,275 0.310 104 2009 3,400 0.312 107 2010 3,350 0.314 109 Table L: Economic Data for a Hypothetical Economy (note: population and nominal GDP are both expressed in the same units, billions, so if these two numbers are relevant to answering a question, there is no need to do a multiple by 1000.) 121. Consider the economic data provided for a hypothetical economy in Table L above. What is real GDP for 2009 for the economy depicted in Table L? (If necessary, at each stage of calculation, round to the nearest 1/100th (0.00).) A. $10,897.44 billion B. $10,564.52 billion C. $10,668.79 billion D. $3,400 billion E. $3,178 billion

Answer 1

Answer : 119) The answer is option E.

Real GDP = (Nominal GDP / GDP deflator) * 100

For 2008 :

Real GDP = (3275 / 104) * 100 = 3149.04

Real GDP of 2009 = (3400 / 107) * 100 = 3177.57

Real GDP growth rate between 2008 and 2009 = [(Real GDP of 2009 - Real GDP of 2008) / Real GDP of 2008] * 100

=> Real GDP growth rate between 2008 and 2009 = [(3177.57 - 3149.04) / 3149.04] * 100 = 0.91%

Hence except option E other options are not correct. Therefore, option E is the correct answer.

120) The answer is option D.

Here 2009 is the base year.

Real GDP = Current year quantity * Base year price level

Real GDP of 2008 = (40 * 1.10) + (100 * 0.80) = 44 + 80 = $124

Hence except option D other options are not correct. Therefore, option D is the correct answer.

121) The answer is option E.

Real GDP of 2009 = (Nominal GDP of 2009 / GDP deflator of 2009) * 100 = (3400 / 107) * 100 = $3178 billion.

Hence except option E other options are not correct. Therefore, option E is the correct answer.