Question

The following are the values of goods and services produced in 2018 and 2019 utilizing the...

The following are the values of goods and services produced in 2018 and 2019 utilizing the prices prevailing in those two years. Compute the Chain-weighted Real GDP for 2019. (Show your work).

Prices Utilized

Values of Goods and Services of the years ($million)

2018

2019

2018

112.4

138.2

2019

118.3

146.5
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Answer #1


Answer

2018 is taken as the base year
FOR calculating the chain weighted Real GDP for year 2019 we need the following

Value of goods produced in 2018 at 2018 prices = 112.4
Value of goods produced in 2019 at 2018 prices =138.2
Value of goods produced in 2018 at 2019 prices = 118.3
Value of goods produced in 2019 at 2019 prices =146.5

The growth rate with 2018 prices
= (138.2-112.4)/112.4 *!00
= 25.8/112.4 *100
=22.95 %

The growth rate with 2019 prices
=(146.5-118.3)118.3 *100
= 23.83 %

The chain weighted growth rate is the average of the two growth rates
= (22.95 +23.83 )/ 2
=23.39 %

Chain weighted real GDP for 2019
= Real GDP in 2018 + growth rate of the Real GDP
= 112.4 + 23.39 % of 112.4
= 138.690 million $

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