Question

The data in the table below show the total output (a mixture of consumer, capital, and government services) and prices of each product for the distant country of Vindaloo. All figures are in billions of dollars and the base year is 2016. a. Complete the table below. Enter your responses rounded to one decimal place when needed. Item 12 13 14 15 16 17 189 110 111 112 2016 2017 2018 Prices Prices ou. Prices I M Nominal GDP Qty OD Nominal GDP DOOD Qty Nominal GDP Real GDP Real GDP Qty Year 2017 Year 2016 Year 2018 52 $2.30 $119.6 57 $2.60 $ 1482 60 $2.70 $ 10 11.00 110 12 12.00 14 12.50 5 80.00 400 6 75.00 450 6 90.00 6 53.00 318 6 63.00 378 7 73.00 947.6 1120.2 Hot dogs DVDs Farm tractors Parking meters Totals 144 b. The value of nominal GDP in 2017 is $ when needed. 11202 and in 2018 is $[ Enter your responses rounded to one decimal place and in 2018 is $ . Enter your responses rounded to one decimal place when c. The value of real GDP in 2017 is $ needed. d. The annual growth rate of nominal GDP in 2017 IS decimal place when needed. % and in 2018 is %. Enter your responses rounded to one e. The annual growth rate of real GDP in 2017 IS place when needed. and in 2018 is %. Enter your responses rounded to one decimal Suppose that the population of Vindaloo is as follows in the table. I 2016 29 million 2017 30 million 2018 31 million f. The real GDP per capita in 2016 is $D nearest dollar. , in 2017 is $C , and in 2018 is $C Round your answers below to the % and in 2018 is %. Enter your responses rounded to one g. The growth rate of real GDP per capita in 2017 is decimal place when needed.

Answer 1

(a)

10 2016 Qty Qty Qty Prices Year 2016 2.30 11.00 80.00 53.00 Hot dogs DVDs Farm tract Parking m Totals Nominal GDP 119.6 110 400 318 947.6 2017 Prices Nominal Real GDP Year 2016 GDP 2.60 148.2 131.1 12.00 144 132 75.00 450 480 63.00 378 318 1120.2 1061.1 11 2018 Prices Nominal Real GDP Year 2016 GDP 2.70 162 138 12.50 175 90.00 540 480 73.00 511 371 1388 1143 154 6

(b) The value of nominal GDP in 2017 is $ 1120.2 billion and in 2018 is $ 1388.0 billion

The value of nominal GDP in 2018 = 60x2.7 + 14x12.5 + 6x90 + 7.73 = 1388.0 billion

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(c) The value of real GDP in 2017 is $1061.1 billion and 2018 is $1143.0 billion (2016 prices)

The value of real GDP in 2017 = 2.3x57 + 11x12 + 5x6 + 6x6 = 1061.1 billion

The value of real GDP in 2018 = 2.3x60 + 11x14 + 5x6 + 6x7 = 1143.0 billion

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The annual growth rate formula is r = (final value/initial value)^(1/number of years) - 1

(d) The annual growth rate of nominal GDP in 2017 is 18.2% and in 2018 is 21.0%

The annual growth rate of nominal GDP in 2017 = (1120.2/947.6)^(1/1) - 1 = 18.2%

The annual growth rate of nominal GDP in 2018 = (1388/947.6)^(1/2) - 1 = 21.0%

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(e) The annual growth rate of real GDP in 2017 is 12.0% and in 2018 is 9.8%

Note that the real GDP in 2016 = nominal GDP in 2016 since we are using 2016 as the base year.

The annual growth rate of real GDP in 2017 = (1061.1/947.6)^(1/1) - 1 = 12.0%

The annual growth rate of real GDP in 2018 = (1143/947.6)^(1/2) - 1 = 9.8%

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(f) The real GDP per capita in 2016 is $32676, in 2017 is $35370 and in 2018 is 36871

The real GDP per capita in 2016 = real GDP in 2016 / population in 2016 = 947.6 billion/29 million = 32676

The real GDP per capita in 2017 = real GDP in 2017 / population in 2017 = 1061.1 billion/30 million = 35370

The real GDP per capita in 2018 = real GDP in 2018 / population in 2018 = 1143 billion/31 million = 36871

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(g) The growth rate of real GDP per capita in 2017 is 8.2% and in 2018 is 6.2%

The growth rate of real GDP per capita in 2017 = (35370/32676)^(1/1) - 1 = 8.2%

The growth rate of real GDP per capita in 2018 = (36871/32676)^(1/1) - 1 = 6.2%

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