Question

Macroeconomics

TUME J XIOO-20/ Deflator The table below contains data for the country of Togogo. The base year is 1974. 120-100 xloo=2 Year Nominal GDP GDP $2000 $3000 $3750 $6000 200 32.37 1974 1975 1976 1977 12034 }20% 150 3 25% 14. Refer to Table 23-7. Which of the following is not correct? a. This economy experienced growth from 1974 to 1975. b. This economy experienced growth from 1975 to 1976. c. This economy experienced growth from 1976 to 1977. d. This economy experienced inflation from 1974 to 1975, from 1975 to 1976, and from 1976 to 1977. 15. Refer to Table 23-7. From 1975 to 1976, a. inflation was 25% and output did not grow. b. inflation was 25% and output grew. c. inflation was 50% and output did not grow. d. inflation was 50% and output grew.

Answer 1

14. Answer : Option B

The statement which is not correct is, this economy experienced growth from 1975 to 1976.

From the table itself it is clear that from 1974 to 1977 the GDP has been increasing. But during 1975 to 1976 the growth rate had declined. Thus the answer is option B.

15. Answer : Option A

Inflation was 25% and output did not grow.

From the table, inflation can be obtained. GDP deflator is the measure of inflation. with the GDP deflator the rate of inflation can be obtained as 25%. It is already marked in the table.