Question

A- The Bureau of Economic Analysis (BEA) calculates nominal and
real GDP for the United States. Currently, it uses 2012 as the base
year. Based on this information alone, what could you say about the
relationship between nominal and real GDP for 2012 for the United
States? (2 points)

B- In 2018, nominal GDP was approximately 20.5 trillion and GDP
deflator was approximately 110 . In 2019, nominal GDP was
approximately 21.5 trillion and GDP deflator was approximately 112.
Calculate real GDP for 2018 and 2019 using two decimal places (4
points).

C- Based on the information given/calculate in A and B above,
calculate the percentage growth for the US economy from 2018 to
2019. (2 points)

D- Explain what your answer in C above means. (Make up a growth
rate and answer this question if you don't know how to calculate
C). (4 points)

Answer #1

A. Since, the base year is 2012, the nominal GDP calculated will
be **equal** to the real GDP of year 2012. The logic
is simple, the fixed price here is equal to the current price.

B. GDP Deflator = (Nominal GDP/Real GDP)*100

For 2018:

110= (20.5 trillion/Real GDP)*100

--> Real GDP'18 = **18.63** trillion

For 2019:

112 = (21.5 trillion/ Real GDP)*100

--> Real GDP'19 = **19.20** trillion

C. Percentage growth rate in US economyduring 2018-2019 = (Real GDP'19 - Real GDP'18) ÷ Real GDP × 100

= (19.20-18.63)÷ 18.63 × 100

= **3.06** %

D.

- The growth rate is always calculated on the basis of real GDP of an economy because it makes the GDPs of different years comparable. Nominal GDP will show biased results.
- GDP is the most used indicator of growth used by all the economies including US.

The GDP deflator in the United States in 2014 was 104, and real
GDP in 2014(in 2012 dollars) was $16.2 trillion. The GDP deflator
in the United States in 2017 was 108, and real GDP in 2017 (in
2012 dollars) was $18.1 trillion. What was the percentage
increase in production between 2014 and 2017, and by what
percentage did the price level rise between 2014 and 2017?
The percentage change in production between 2014 and 2017 is
???? percent.
The...

Which of the following statements is false?
a)
Nominal GDP in the United States was
approximately seven times greater in 2012 than in 1950.
b)
Real GDP in the United States was
approximately seven times greater in 2012 than in 1950.
c)
Real GDP is GDP adjusted for price
changes.
d)
The U.S. population was approximately twice
as large in 2012 than in 1950.

The GDP deflator in the United States in 2003 was 87, and real
GDP in 2003 (in 2009 dollars) was $13.3 trillion.
The GDP deflator in the United States in 2006 was 95, and real
GDP in 2006 (in 2009 dollars) was $14.6 trillion.
What was the percentage change in production between 2003 and
2006, and by what percentage did the price level change between
2003 and 2006?

Suppose you have the following information: 2017 is the Base
Year Nominal GDP in 2017 = $17 Trillion Nominal GDP in 2018 = $18.5
Trillion The GDP Deflator in 2018 is 1.045 What is the 2018: a)
nominal GDP growth rate; b) real GDP growth rate; and c) inflation
rate?

Exercise 2.4
In 2021, the nominal GDP of Scotland was USD 26.678
trillion.
The nominal GDP is expected to reach USD 23.345
trillion in 2022.
In comparison, the real GDP of Scotland in 2021 stood
at USD 20.987 trillion.
The nation’s real GDP is then expected to become USD
22.765 trillion in 2022.
Based on the information presented above, calculate the
following macroeconomic indicators for years 2021 and
2022.
Calculate the GDP price deflator in years 2021 and
2022.
Determine...

Suppose a county’s national accounts
are given by the following table.
Year
Nominal GDP
Deflator
Real GDP
2017
________
104
$755,000
2018
$855,000
105
_______
2019
$950,000
______
$896,226
Complete the missing data in the following table (show formula
and calculations here)
2017 Nominal GDP =
2018 Real GDP =
2019 Deflator =
What is the rate of inflation between 2017 and 2019? (show
formula and calculations)
What is the growth rate of real GDP between 2018 and 2019 (show...

If in some year nominal GDP was $15 trillion and real GDP was
$75 trillion, what was the GDP deflator?
a. 20.
b. 40.
c. 250.
d. 400.
In the economy of Jordan in 2018, exports were $300, GDP was
$2700, government purchases were $500, imports were $480, and
consumption was $900. What was Jordan’s investment in 2018?
a. $1270
b. $1230
c. $1370
d. $1480

Refer to the following table, and answer the questions that
follow:
Year
Nominal GDP
Real GDP
GDP deflator
2012
$210,000
??
100.0
2013
??
$215,000
110.0
2014
$260,000
$220,000
??
(a) Compute the nominal GDP in 2013.
(b) Compute the price level in 2014.
(c) Calculate the inflation rate between 2012 and 2013.

Exercise 2.2
The Republic of Mauritius is an island nation in the
Indian Ocean, located about 2,000 kilometres off the southeast
coast of the African continent.
Since its independence from the U.K. in 1968, Mauritius
has developed from a low-income, agriculture-based economy to an
upper middle-income diversified economy that is based on
tourism, textiles, sugar, and financial
services.
In 2019, the country’s nominal GDP was USD 15.678
trillion.
The nominal GDP is expected to reach USD 13.345
trillion in 2020....

5. Real versus nominal GDP
Consider a simple economy that produces two goods: pens and
erasers. The following table shows the prices and quantities of the
goods over a three-year period.
Year
Pens
Erasers
Price
Quantity
Price
Quantity
(Dollars per pen)
(Number of pens)
(Dollars per eraser)
(Number of erasers)
2018
1
150
2
160
2019
2
135
4
230
2020
3
110
4
165
Use the information from the preceding table to fill in the
following table.
Year
Nominal...

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