Question

For this set of blanks, enter all numbers with one decimal place 1.0, 2.5 etc.

The price index for year 1 is Blank 1

The price index for year 2 is Blank 2

The price index for year 3 is Blank 3

The price index for year 4 is Blank 4

The price index for year 5 is Blank 5

The price index for year 6 is Blank 6

For this set of blanks do not use dollar signs or decimals.

The real GDP for year 1 is Blank 1

The real GDP for year 2 is Blank 2

The real GDP for year 3 is Blank 3

The real GDP for year 4 is Blank 4

The real GDP for year 5 is Blank 5

The real GDP for year 6 is Blank 6

For this set of blanks, do not use percentage signs. For those amounts requiring a decimal point, use only one decimal place, otherwise use no decimals. Don't forget to put a minus sign where appropriate.

The percent change in real GDP from year 1 to year 2 is Blank 1

The percent change in real GDP from year 2 to year 3 is Blank 2

The percent change in real GDP from year 3 to year 4 is Blank 3

The percent change in real GDP from year 4 to year 5 is Blank 4

The percent change in real GDP from year 5 to year 6 is Blank 5

Note that from year 4 to year 5, the rate of inflation was A) Blank 1 % (enter percentage as a whole number, no decimal points, enter minus sign if appropriate). This phenomenon is known as B) Blank 2 (enter number from Word Bank, not the actual word).

Year	Output (units of widgets)	Price of Widgets ($)
1	4	4
2	8	8
3	10	8
4	15	10
5	12	8
6	16	10

Answer 1

Solution:

Year	Output	Price	Price index	Nominal GDP	Real GDP	%change in real GDP
1	4	4	100	16	16
2	8	8	200	64	32	100.00%
3	10	8	200	80	40	25.00%
4	15	10	250	150	60	50.00%
5	12	8	200	96	48	-20.00%
6	16	10	250	160	64	33.33%

　

Explanation:

Price index = Price index current year / Price index base year *100

Nominal GDP is the value of final products and services evaluated at current-year prices

Gross GDP is the value of final products and services evaluated at base-year prices