Suppose an economy produced only video games. The annual prices and quantities a
ID: 1110461 • Letter: S
Question
Suppose an economy produced only video games. The annual prices and quantities are given in this table.
2017
2018
Quantity of pistachios
1,000
1,100
Quantity of video games
500
500
Price of pistachios
$1.00
$1.50
Price of video games
$15.00
$14.75
Calculate nominal GDP in 2017 and 2018
Using 2017 as the base year calculate real gdp in 2017 and 2018
Calculate the price index in 2017 and 2018 (use 2017 as base year)
Calculate the rate of inflation between 2017 and 2018 (use 2017 as base year)
2017
2018
Quantity of pistachios
1,000
1,100
Quantity of video games
500
500
Price of pistachios
$1.00
$1.50
Price of video games
$15.00
$14.75
Explanation / Answer
2017 2018 Quantity of pistachios 1,000 1,100 Quantity of video games 500 500 Price of pistachios $1.00 $1.50 Price of video games $15.00 $14.75 Nominal GDP =Qi*Pi 2017 2018 $8,500.00 $9,025.00 Real GDP 2017 2018 $8,500.00 $1,122.50 Price index 2017 2018 100.00 106.18 Rate of inflation 6.18
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