Question

2018 Questions 6-12 Zesta's Economic Data 2016 2017 Actual GDP ($ Billions) 900 B = ? Actual GDP growth rate (%) 2.0% Real GDP ($ Billions) A = ? 2019 965 2.50% 915 E = ? D = ? Real GDP growth rate (%) GDP Price Deflator Rate of inflation (%) C = ? 103 101 105 F = ? Actual = Nominal = Current GDP in cell A (rounded to closest 10 dollars) is a) 854 b) 866 c) 890 d) 905 GDP in cell B (rounded to the closest 10 dollars) is a) 860 b) 888 c) 903 d) 920 The percentage growth rate of GDP in cell C (second decimal; no rounding) is a) 0.01 b) 0.07 C) 0.19 d) 0.22 The percentage growth rate of GDP in cell D (second decimal; no rounding) is a) 1.83 b) 2.66 c) 2.78 d) 2.89 GDP in cell E (rounded to the closest 10 dollars) is a) 890 b) 920 C) 930 d) 940 11. The percentage inflation rate in cell F (second decimal; no rounding) is a) 2.10 b) 2.16 c) 2.22 d) 2.34 What would be the impact on the Canadian AD/AS model of a much larger Canadian and world wheat crop than forecast by crop experts for 2020? a) There would be no impact on the AD, SRAS and LRAS curves. b) The AD, SRAS and LRAS curves would increase. c) The AD, SRAS and LRAS curves would decrease. d) The AD curve would not shift while the SRAS and LRAS curves would increase.

Answer 1

6. Actual GDP in 2016 = $900 billion

GDP Deflator 2016 = 101

Real GDP 2016 = (Actual in 2016/GDP Deflator in 2016) * 100 = $(900 billion/101) * 100 = $891.09 billion

Ans: c) 890

7. Actual GDP growth rate in 2017 = 2.0%

Actual GDP in 2017 = (1+0.02) * Actual GDP in 2016 = 1.02 * $900 billion = $918 billion

Ans: d) 920

8. Real GDP in 2017 = (Actual in 2017/GDP Deflator in 2017) * 100 = $(918 billion/103) * 100 = $891.26 billion

Real GDP growth rate in 2017 = [(Real GDP in 2017 - Real GDP in 2016)/Real GDP in 2016] * 100 = [($891.26 billion - $891.09 billion)/$891.09 billion] * 100 = 0.019

Ans: a) 0.01

9. Real GDP in 2018 = $915 billion

Real GDP growth rate in 2018 = [(Real GDP in 2018 - Real GDP in 2017)/Real GDP in 2017] * 100 = [($915 billion - $891.26 billion)/$891.26 billion] * 100 = 2.66%

Ans: b) 2.66