Growth: 1.)What is the difference between real GDP and nominal GDP? . How fast w
ID: 1140486 • Letter: G
Question
Growth:
1.)What is the difference between real GDP and nominal GDP? . How fast was the real economy growing over 2011-2016?. How does this compare to its long-run trend over 1996-2016?
Business Cycles:
2.)Did real GDP grow in every year?, What years are recession years?
Inflation Trends
3.) What was the average rate of inflation over 2011-2016?, What was the average rate of inflation over 1996-2016?
Q Search Sheet Insert Page Layout Formulas Data Review View 10 & Center, $ , % , il conditional Format Styles L Format. 0 (10) 1521.9 131754.284 262982.6028 156702.59480.04447216 1.0447210.23033169 1.23033160.180216259 1.180216259 0.022944551 204679198004481408 1.0481408, 0.384840103 1.384840103' 0.306163425 1.30616342"0015576324 2610.5 161801.913 13131.0 171252.366 530498.0754 287042.623 9.04753236 1.04753236' 0.456656336 1456656536 0.402402519 1.402402519 0.02208589 3493. 168035.789 3879. 172806.827 4406.4 186284.311 661206.0463341297.2973 0.04127484 1041274840.246387267 1.246387267 0.1890126071.189012607 0.033613445 766963.5962 403126.76060.0099834 009341 0.159946435 1.159946435 0.18160132 1.181160132 0.028455285 1.100495893 0.015810277 1073333.087 553608.6957 9.02861211 1.028612110.242882743 1.2428827430.247880069 1.247880069 0.022790439 1258677.777650628.3784 0.03798891 1.037988910.172681428 1.172681428 0.175249564 1.175249564 0.026630435 443639,3443 0.01741695 1.01741695 0.12597723 .125977231 1380077.654 70102.9412 0.03513214 1.03513214 0.096450322 1.096450322 15626.0 221809.625 5604.7212221.847 31392 0.02854972 1.02854972 0.161422912 1.161422912 0.091462155 1.091462155 0.032258065 2093136.029 932207.2285 0.01876171 1.018761710.30588081 1.30588081 0.274565798 1.274565798 0.028482143 2109349.438 1030016.8970.0013658 0.9986342 0.007745989 .007745989 2165043 990053.7634 402536757097463243-0.026403 194 1.026403 194 -0.038798522 0.961201478 -0.003557777 1060990.12 0.02563767 102563767 0.128923154 1.128923154 2915413.112 1184008.859 0.01550836 1.01550836 0.192804299 .192804299 0.1159471 1.115947111 o.031565286 1195869.093 0.02249546 1.02249546 0.159419247 1.159419247 0.010017014 1.0100170140.020694499 3902068.612 1171336.308 0.01842081 1.01842081 0.154394618 1.154394618-0.020514607 0.979485393 0.014647595 1111027.299 0.02451973 1.02451973 0.106463846.106463846-0.031487336 0.948512644 0.016221878 4656006.11 1015037.874 0.0288091 102880910.078403806 1.0784038060.086396999 0.913603001 0.001186976 1.008659727 0.012615129 16197.0 285394.461 3380186.074 7388.7374948.172 7859.2 421858.878 240.007 01567215' 0.160708176 1.160708176 0.008659727Explanation / Answer
1).
Real GDP is a macroeconomic measure that reflects the value of all the goods and services produced by an economy in a given year with respect to base year price.It is the measure of the value of economic output adjusted for price changes inflation or deflation.
Nominal GDP on the other hand is evaluated at the current market prices. It is the economic output derieved without the inflation adjustement.
One of the main difference between nominal and real GDP is that real GDP is adjusted for inflation, while nominal GDP is not. As a result, nominal GDP will often appear higher than real GDP.
Real GDP economy has grown by 11.479% in 2011-2016 period with the annual growth rate of 1.91% which was slower as compared to its long run trend over 1996-2016 with the annual growth rate of 2.38%
2. Real GDP did not grown in every year. In year 2008 and 2009, there is the negative growth rate in the GDP which depicts the recession period. Real GDP has clearly fallen from 15626.0 bn$ in 2007 to 15208.8 bn$ in 2009.
3. Average rate of inflation over the period of 2011-2016 was 1.31%. Over the period of 1996-2016 the rate of inflation was 2.15%.
* All questions are answered wrt. data provided inside the tables.
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