Use the following data to determine a hypothetical Economy\'s Nominal GDP, GDP D

Question

Use the following data to determine a hypothetical Economy's Nominal GDP, GDP Deflator, and Real GDP Table 1.0 Year Output Price Nominal GDP GDP Deflator Real GDP 550 11,000 500 12,000 6,000,000 450 13,000 5,850,000 600 600 15,000 9,000,000 6,050,000 4 15,000 9,000,000 1. Complete table 1 above using year 3 as the base. (18 points) TABLE 2.0 CURRENT GDP GDP INDEX REAL GDP 1,000 1994 1995 1996 1997 1998 1999 1,260 1,500 1,600 1,800 90 100 105 120 128 150 160 1,200 1,250 1.250 1,200 2. Calculate the GDP INDEX in table 2.0 above (7points)

Explanation / Answer

Answer : Table 1 :

Year 3 as Base year

Answer 2: Table 2 has been already solved

2000. 2000. 160. 1250

GDP index = ( Nominal GDp/ Real GDP) ×100

Year Output Price Nominal GDP = Current output× Current price GDP deflator= Nominal GDP/ Real GDP ×(100) Real GDP= base year price× current output 1 500 10,000 5,000,000 83.33 6,000,000 2 550 11,000 6,050,000 91.67 6,600,000 3 500 12,000 6,000,000 100 6,000,000 4 450 13,000 5,850,000 108.33 5,400,000 5 600 15,000 9,000,000 125 7,200,000 6 600 15,000 9,000,000 125 7,200,000

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