if nominal GDP increases while real GDP declines in a given period , what does this say about economic growth and inflation ? explain briefly
Nominal GDP is the GDP in money terms. It is the market value of goods and services estimated at the price prevailing in the year of manufacturing. It is the GDP unadjusted for inflation. The nominal GDP may increase with inflation. The total value of output may increase without corresponding increase in quantity when there is inflation. It is not the true index of economic growth.
Real GDP on the other hand is the real indicator of economic growth. Real GDP is the money value of goods and services estimated by using some base year price. It is the GDP after adjusting the inflation. An increase in real GDP shows that the economy has produced more output and achieved economic growth. A fall in real GDP means the economy has produced less output and achieved less growth.
When estimating GDP growth rate, if the nominal GDP has increased, while real GDP has declined, the situation shows that the inflation has increased and the growth rate has declined.
if nominal GDP increases while real GDP declines in a given period , what does this...
If nominal GDP growth between period t−1 and t was 3.3%, while real GDP growth during the same time was 2.7%, then the GDP deflator in between t−1 and t. a)must have increased due to inflation. b)possibly increased due to deflation. c)must have decreased due deflation. d)stayed the same due to inflation. e)possibly decreased due to deflation.
Question 2 If over a period of time real gross domestic product (GDP) increases while nominal GDP decreases, then this implies Select one: a. a significant rise in the price level. b. a significant drop in the price level. c. that real GDP is higher than nominal GDP. d. that the given period occurs before the base period. e. that the given period year occurs after the base period. Question 3 Indicate which expenditure category of GDP changes and the...
if the GDP deflator increases from 105 to 120 while nominal GDP increases from $26,000 to $30,000 what is the new level of real GDP if necessary round your answer to the nearest hundredth
How do the calculated values for inflation, the real GDP growth rate and nominal GDP growth rate relate to each other? A. They are related in that the growth rate in real GDP plus inflation rate equals (approximately) the growth rate in nominal GDP. B.They are related in that the growth rate in real GDP minus inflation rate equals (approximately) the growth rate in nominal GDP. C.They are related in that the growth rate in nominal GDP plus inflation rate...
If productivity increases from one year to the next, only nominal GDP would increase. only real GDP would increase. nominal and real gross domestic product would increase. If inflation occurs in a given year, the change in the real measurement (GDP) would be equal to the change in the nominal one. the change in the real measurement (GDP) would be smaller than the change in the nominal one. the change in the real measurement (GDP) would be greater than the...
Question Suppose an increase in productivity increases nominal GDP by 8% and inflation is -3%. (.e. deflation). What is the real GDP growth rate? Provide your answer below: FEEDBACK SUBMIT MORE INSTRUCTION " Content attribution NO revious
GDP Inflation Deflator Rate YEAR CPI GDP %GDP | Real GDP | %RGDP (%CPI) |(2015-100) 2012 231.2 95.43 1619 2013 234.72 97.11 16785 2014 236.27 98.94 17522 2015 237.83 100.00 18219 2016 242.7 01.09 1870 2017 247.91 103.02 19485 1. Calculate the annual inflation rate using the CPI. 2. Calculate the annual GDP growth rate using the GDP. 3. Explain how the inflation rate and the GDP growth have been moved. 4. Calculate the real GDP using GDP deflator by...
What does annual economic growth refer to? a) annual increases in GDP b) annual increases in consumption spending c) annual increases in investment spending d) annual increases in Real GDP e) none of the above
1. Year Nominal GDP GDP Price deflator Real GDP Inflation Rate Growth Rate 2008 $14,833.60 99.23 -- -- 2009 14,417.90 100.00 2010 14,779.40 101.21 2011 15,052.40 103.20 2012 15,470.70 105.00 2013 15,759.00 106.59 2014 17,420.70 108.27 2015 18,287.20 110.01 2016 18,905.50 112.08 2017 19,738.90 114.27 a. Fill in the blanks in the table above and show your work. b. Over this time period, does inflation...
If nominal GDP increases by 6%, the price level increases by 2% and the population grows by 1%, what is the rate of economic growth?