Question
Consider an economy that produces three goods, cameras, legal services, and books according to the following...
Consider an economy that produces three goods, cameras, legal
services, and books according to the following table below.
2013 2014 Product Quantity Price Quantity Price Camera 100 $10 120
$12 Legal services 50 15 45 20 Books 200 40 210 45
a. Determine the nominal GDP in this economy in 2013 and
2014.
b. Determine the real GDP in this economy in 2013 and 2014 using
2014 as base year.
c. Determine the GDP deflator in this economy in 2013 and 2014
using 2014 as base year.
d. Determine the CPI index in 2013 and 2014 using 2014 quantities
as a reference basket.
e. Determine the inflation rate in this economy between 2013 and
2014 using the CPI index.
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Answer #1
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