y Quiz: Homework 1-due Janu https://iuinstructure.com/course·.. |qSearch × C1Pts

Question

y Quiz: Homework 1-due Janu https://iuinstructure.com/course·.. |qSearch × C1PtsQuestion lQuestions1IX A Pas Question 13 1 pts Questions 13 to 15 refer to the following scenario. Consider a two-good (A and B), two-period (year 1 and year 2) economy. In year 1, the economy produced 10 units of A at a per unit price of $1 and 5 units of B at a per unit price of $2. In year 2, the economy produced 15 units of A at a per unit price of $1 and 5 units of B at a per unit price of $3. Using the Laspeyres approach, real GDP in year 1 is.....and real GDP in year 2 is real GDP in year 1 [ Choose] real GDP in year 2 [Choose] 1 pts D Question 14 and real GDPin Using the Paasche approach, real GDP in year 1is year 2 is l Choose l real GDP in year 1 real GDP in year 2

Explanation / Answer

Q13. The real GDP calculated by using Laspeyres approach is the total value of GDP holding prices constant at their first year level (year 1).

Thus, real GDP in year 1 = 10(1) + 5(2) = 20

Real GDP in year 2 = 15(1) + 5(2) = 25

Q14. The real GDP calculated by using Paasches approach is the total value of GDP holding prices constant at their second year level (year 2).

Thus, real GDP in year 1 = 10(1) + 5(3) = 25

Real GDP in year 2 = 15(1) + 5(3) = 30.

Q15. The Fisher real GDP for year 2 = (30+25)/2 = 27.5 and the growth rate of real GDP is 22.36%.

Ans. (b)

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.