The table shows the quantities produced and prices in 2015 and 2016 for an econo
ID: 1107741 • Letter: T
Question
The table shows the quantities produced and prices in 2015 and 2016 for an economy which produces only food and fun. In 2015 Item Food Fun Quantity 92 72 Price $1 $2 The base year is 2016 Using the chained-dollar method, compare the growth rates of nominal GDP and real GDP in 2016. >>Answer to 1 decimal place >>> If your answer is negative, include a minus sign lf your answer is positive. do not include a plus sign. In 2016 Item Food Fun Quantity 71 70 Price S9 S9 The growth rate of nominal GDP in 2016 is percent. The growth rate of real GDP in 2016 using the chained-dollar method is percent.Explanation / Answer
The nominal GDP is the value of output in current year prices and real GDP is value of output in base year prices. The NGDP=RGDP for the base year. The NGPD for 2015 and 2016 is given in the table below
2015
Food
92
1
92
Fun
72
2
144
2016
NGDP
236
Food
71
9
639
Fun
70
9
630
NGDP
1269
To calculate the chain dollar GDP growth rate, the following steps are done
The growth rate of nominal GDP in 2016 is 437.71%.
The growth rate of GDP in chained dollar is 2.86%
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2015
Pizza
99
4
396
TP
52
9
468
2016
NGDP
864
Pizza
108
6
648
TP
65
3
195
NGDP
843
To calculate the chain dollar GDP growth rate, the following steps are done
The growth rate of nominal GDP in 2016 is 959.1735%.
The growth rate of GDP in chained dollar is 3.34%
2015
Food
92
1
92
Fun
72
2
144
2016
NGDP
236
Food
71
9
639
Fun
70
9
630
NGDP
1269
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