Question

solve question 4 and 5

3. Calculate the following given the information about the economy in the table: Total population Noninstitutional population Incapable of working Not in the labour force Employed Unemployed 260 million 200 million 60 million 66 million 134 million 10 million 5. Calculate the following given the following information about the economy in 1985, 1995, and 1999: 1985 1995 1999 Nominal GDP 4,213 9,256.1 (in billions of dollars) GDP deflator 73.7 98.1 (index, 1996=100) Real GDP 7,543.8 8,848.2 (in billions of 1996 dollars) Population 238 265 275 (in millions) a. Labour force. Labour forcer Employd Dremployed LES 134 +0 111 milion a. Nominal GDP in 1995. b. Real GDP in 1985. b. Unemployment rate. Vremployment Rate : Unemp byd = 10 Total blarence 199 = 0.94% 4. Create a price index for Green Bay Packer fans using the following basket of goods with 2000 prices as the base year. Prices Quantities in 2000 2000 2001 90 lbs of cheese $2.50/b $2.00/b 12 flannel shirts S15/shirt $20/shirt 16 football tickets S25/ticket $30/ticket c. Rise in the price level from 1985 to 1999. d. Growth in real output from 1985 to 1999. e. a. What is the price of the basket of goods in cach year? Show how the price index is 100 in the base year 2000 Per capita real GDP in 1985, 1995, 1999. What was the growth in real output from 1985 to 1999? b. Using 2000 as the base year, what is the Price index in 2001? By how much have prices risen? 6. Answer each of the following questions about nominal output, real output, and inflation: a. Nominal output increased from $8.8 trillion to $9.3 trillion from 1998 to 1999. The GDP deflator rose over that same year by 1.5%. By how much did real output increase? c. What are some potential flaws of this price index?

Answer 1

5) GDP deflator = Nominal Gdp/ Real Gdp x100

By using this equation we can calculate nominal gdp, real gdp.

a) Nominal GDP in 1995=7400.47 b) Real op in 1985 = 571614 c) 104.61 d) 3131.8

4) b) price index

2000 Pop, 2001/P9 l Poh tao 2.50 25 2.00/ 180 225 Do 240 180 30 480 400 1900 805 PI E Pia x100 Epol 900 x100 = 805 = 111.8

A)

EPL -X100 Epo -X100 42.5 120.24