8. Problems and Applications Q8 Consider the following data on U.S. GDP: GDP Yea

Question

8. Problems and Applications Q8 Consider the following data on U.S. GDP: GDP Year 2011 2012 2013 2014 2015 (Billions of current dollars) 15,517.9 16,155.3 16,663.2 17,348.1 17,942.9 (Billions of 2009 dollars) 15,020.6 15,354.6 15,583.3 15,961.7 16,345.0 Source: "National Economic Accounts. "U.S. Bureau of Economic Analysis. The percentage change in nominal GDP from 2013 to 2014 was The percentage change in real GDP from 2012 to 2013 was True or False: The percentage change in real GDP from 2012 to 2013 was higher than the percentage change in real GDP from 2011 to 2012 True False

Explanation / Answer

Answer - The table contains data of GDP in US from year 2011 to 2015. The base year is 2009. Third column shows data of real GDP in the respective years.

Percentage change in the GDP = [(ending GDP - initial GDP) / Initial GDP]* 100

According to the given table, Nominal GDP in 2013 was $16663.3 billion and In 2014, it was $17348.1 billion

The Percentage change in nominal GDP from 2013 to 2014 = [(17348.1 - 16663.2) / 16663.2] * 100

% change in nominal GDP in 2013 to 2014 = 68490 / 16663.2

% change in nominal GDP in 2013 to 2014 = 4.11%

Real GDP in 2012 was $15354.6 billion and in 2013 was $15583.3 billion. Change in real GDP was $228.7 billion

Now percentage change in real GDP in 2012 to 2013 = [(228.7) / 15354.6] * 100

% change in real GDP from 2012 to 2013 = 1.49%

True and False:-

Percentage change in real GDP from 2012 to 2013 has already calculated. Now we have to calculate percentage change in real GDP from 2011 to 2012. Real GDP in 2011 was $15020.6 billion. In 2012 real GDP became $15354.6 billion.

Change in real GDP is = 15354.6 - 15020.6

Change in real GDP is = $334 billion

Now, percentage change in real GDP from 2011 to 2012 = [(334) / 15020.6] * 100

% change in real GDP from 2011 to 2012 = 2.22%

Now, we can compare the stats. Percentage change in real GDP (2.22%) from 2011 to 2012 was greater that percentage change in real GDP (1.49%) from 2012 to 2013.

The given statement was false.

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