Nominal GDP Real GDP 103.6 91.2 892.8 76.5 834.9 1929 977 1930 1931 587 7258 193

Question

Nominal GDP Real GDP 103.6 91.2 892.8 76.5 834.9 1929 977 1930 1931 587 7258 1932 36. Refer to Table 3. What are the GDP deflator and the inflation rate for 1931? a. 9.16,-11S d.109137, 11.5 b. 9.16,-103 c. 1091,37, 10.3 37. Refer to Table 3. What are the GDP deflator and the inflation rate for 1932? a 8.09,-11.7 d. 1236.46, 13.3 b. 8.09.16,-13.3 e. 1236.46, 11.7 38. Refer to Table 3. What was the growth rate of real GDP for 1930 a better gauge of economic well-being than nominal GDP -862% Real GDP is b.-8.62% Nominal GDP is a better gauge of economic well-being than real GDP c.-943% Real GDP is a better gauge of economic well-being than nominal GDP d-9 43% Nominal GDP is a better gauge of economic well-being than real GDP Table 4: The country of Caspir produces only cereal and milk years are shown below. The base year is 2015 Quantities and prices of these goods for the last several Year Price of Cereal Quaatity of Cereal Quantity of Milk 180 200 200 240 Price of Milk 2015 2016 2017 2018 4.00 $4.00 $5.00 56.00 100 120 150 180 $1.50 S2.00 $2. 50 $3.50 39. Refer to Table 4. In 2015, this country's a nominal GDP was greater than real GDP, and the GDP deflator was grcater than 100 b, nominal GDP was equal to real GDP, and the GDP deflator was equal to 100% c nominal GDP was less than real GDP, and the GDP deflator was less than 100. d. nominal GDP was equal to real GDP, and the GDP deflator was equal to 100 40. Refer to Table 4 In 2016, this country's real GbP was 5880, and the GDP deflator was 1114 b. real GDP was $780, and the GDP deflator was 88 6. d real GDP was $780, and the GDP deflator was 1128 41. Refer to Table 4. This country's inflation rate from 2017 to 2018 was

Explanation / Answer

Q36

GDP deflator = Nominal GDP / Real GDP = 76.5 x 100 / 834.9 = 9.162

Inflation rate = Difference in GDP deflator. GDP deflator in 1930 is 91.2 x 100 / 892.8 = 10.21.

Now the inflation rate is (9.162 - 10.21) x 100 / 10.21 = -10.26

Hence the correct option is B

Q37

GDP deflator in 1932 = 58.7 x 100 / 725.8 = 8.087

Inflation rate = (8.087 - 9.162) x 100 / 9.162 = -11.73

Correct option is A

Q38

Growth rate of real GDP in 1930 = (892.8 - 977) x 100 / 977 = -8.618%

Option A is correct

Q39

Since 2015 is the base year, GDP deflator should be 100 and nominal GDP = real GDP

Option D is correct

Q40

Real GDP = 120 x 4 + 1.5 x 200 = $780

Nominal GDP = 4 x 120 + 2 x 200 = $880.

Hence GDP deflator = 880 x 100 / 780 = 112.8

Option D is correct

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