Question

The nominal GDP for the UK and Germany was 2.75 and 3.75 trillion USD in 2013....

The nominal GDP for the UK and Germany was 2.75 and 3.75 trillion USD in 2013. If the inflation rate in 2014 was 2%, and the nominal GDP was 3.0 and 3.9 trillion respectively in 2014, find the real GDP in 2014 of the two countries in terms of 2013 prices. (set 2013 to be your base year)

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

​​​​Real GDP of UK in 2014 = 2.941

Base year 2013- Price Index =100

Nominal GDP of UK in 2014=3.0

Inflation Rate =2%

Therefore price index of UK in 2014= 100+2=102

Real GDP of UK in 2014 = Nominal GDP of UK in 2014÷Price index of UK in 2014×100

=>3.0÷102×100= 2.941

Real GDP of Germany in 2014 = 3.823

Base year 2013- Price Index =100

Nominal GDP of UK in 2014=3.9

Inflation Rate =2%

Therefore price index of Germany in 2014= 100+2=102

Real GDP of Germany in 2014 = Nominal GDP of Germany in 2014÷Price index of Germany in 2014×100

=>3.9÷102×100= 3.823

Thank You

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Exercise 2.4 In 2021, the nominal GDP of Scotland was USD 26.678 trillion. The nominal GDP...
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 Nominal GDP in 2017 is $18 trillion, and nominal GDP in 2016 is $17.6...
. Suppose Nominal GDP in 2017 is $18 trillion, and nominal GDP in 2016 is $17.6 trillion, and the GDP deflator in 2016 is 99 (=.99), and 2017 is the base year. The rate of growth in real GDP in 2016 is about: a. -1.2% c. 1.2% b. -1.1% d. .2%
Real versus nominal GDP Consider a simple economy that produces two goods: cupcakes and muffins. The...
Real versus nominal GDP Consider a simple economy that produces two goods: cupcakes and muffins. The following table shows the prices and quantities of the goods over a three-year period. Year Cupcakes Muffins Price Quantity Price Quantity (Dollars per cupcake) (Number of cupcakes) (Dollars per muffin) (Number of muffins) 2012 1 120 1 195 2013 2 130 4 195 2014 4 130 4 145 Use the information from the preceding table to fill in the following table. Year Nominal GDP...
Refer to the following table, and answer the questions that follow: Year Nominal GDP Real GDP...
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.
Suppose you have the following information: 2017 is the Base Year Nominal GDP in 2017 =...
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?
Q.2 Refer to the following table, and answer the questions that follow: Year Nominal GDP Real...
Q.2 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...
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....
            Growth rate of nominal GDP – Inflation rate   = a.         price level. b.         the growth...
            Growth rate of nominal GDP – Inflation rate   = a.         price level. b.         the growth rate of nominal GDP. c.         the growth rate of real GDP. d.         the growth rate of long-run trend GDP. e.         how much the economy contracts during a recession. 2.         The consumption category does not include purchases a.         of new cars made by consumers. b.         of entertainment services made by consumers. c.         of new clothing made by consumers. d.         of new houses made by consumers....
Consider a simple economy that produces two goods: pens and erasers. The following table shows the...
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) 2013 1 110 2 185 2014 2 155 4 200 2015 3 110 4 165 Use the information from the preceding table to fill in the following table. Year Nominal GDP Real GDP GDP Deflator...
Compare your answers to the previous two questions. What accounts for the difference between Nominal and...
Compare your answers to the previous two questions. What accounts for the difference between Nominal and Real GDP in year 2, using year 1 as the base year? (Choose all that apply). Real GDP values year 2's output in year 1's prices, while Nominal GDP values year 2's output in year 2's prices. Because year 2's prices are higher than year 1's prices, Nominal GDP is higher than Real GDP in year 2. Real GDP is lower than Nominal GDP...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT