1. A tiny economy only produces baseball bats and sells them in dollars. In 2020, they produced 500 bats for $100 each. In 2021, they produced 800 bats for $200 each. • Calculate nominal GDP for both years. Show your calculations clearly! • Calculate nominal GDP growth rate from 2020 to 2021. O 2020 = (500 x 100) = $50,000 2021 = (800 x 200) = $160,000 O 16,000-50,000 5,000 x 100 = 220% • Calculate real GDP growth rate from 2020 to 2021. 2020 = (500 x 100) = $50,000 2021 (800 x 100) = $80,000 Growth Rate: 80,000-50,000 50,000 x 100 = 60% • In general terms, explain what nominal GDP tells us and what real GDP tells us. You can use the hypothetical numbers here or use actual U.S. statistics in your answer, but be sure to discuss the concept behind nominal GDP vs. real GDP. o Nominal GDP increases when price or quantity increases from year 1 to 2 but real GDP only increases when quantity increases. Thus, real GDP shows real growth only when output increases.

1. A tiny economy only produces baseball bats and sells them in dollars. In 2020, they produced 500 bats for $100 each. In 2021, they produced 800 bats for $200 each. • Calculate nominal GDP for both years. Show your calculations clearly! • Calculate nominal GDP growth rate from 2020 to 2021. O 2020 = (500 x 100) = $50,000 2021 = (800 x 200) = $160,000 O 16,000-50,000 5,000 x 100 = 220% • Calculate real GDP growth rate from 2020 to 2021. 2020 = (500 x 100) = $50,000 2021 (800 x 100) = $80,000 Growth Rate: 80,000-50,000 50,000 x 100 = 60% • In general terms, explain what nominal GDP tells us and what real GDP tells us. You can use the hypothetical numbers here or use actual U.S. statistics in your answer, but be sure to discuss the concept behind nominal GDP vs. real GDP. o Nominal GDP increases when price or quantity increases from year 1 to 2 but real GDP only increases when quantity increases. Thus, real GDP shows real growth only when output increases.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter15: Measuring A Nation's Income

Section: Chapter Questions

Problem 7PA

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Table 7P - 1 shows the price of inputs and the price of outputs at each step in the production process of mak ing a shirt Assume that each of these steps takes place within the country . [LO 7.1 , 7.3 ] a. What is the total contribution of this shirt to GDP , using the standard expenditure method ? b . If we use a value -added method (i.e , summing the value added by producers at each step of the production process , equal to the value of output minus the price of inputs ) , what is the contribu tion of this shirt to GDP ? c If we mistakenly added the price of both inter mediate and final outputs without adjusting for value added , what would we find that this shirt contributes to GDP ? By how much does this overestimate the true contribution
An American retailer purchased 100 pairs of shoes from a company in Mexico in the second quarter of 2016 but does not sell them to a consumer until the third quarter of 2016. In which quarter(s) does(do) the value of the shoes add to U.S. GDP? O the third but not the second quarter O the second quarter but not the third quarter O the second and third quarters O neither the second nor the third quarter Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Which of these statements is not true when we discuss GDP calculation? O a. GDP includes earnings of both the citizens and non-citizens but are residing inside the country. Ob. Incomes made by a citizen outside of his country will be included in the calculation of GDP O c. Expenditures of citizens and non-citizens made inside the country is included in GDP calculation O d. Incomes made by expatriates are included in the calculation of GDP
Suppose that in 1984 the total output in a single-good economy was 8,000 buckets of chicken. Also suppose that in 1984 each bucket of chicken was priced at $19. Finally, assume that in 2005 the price per bucket of chicken was $26 and that 22,000 buckets were produced. Determine the GDP price index for 1984, using 2005 as the base year. By what percentage did the price level, as measured by this index, rise between 1984 and 2005? What were the amounts of real GDP in 1984 and 2005?
Q.1.3 In the base year, a country produced 50 units of output at a price of R6,00 eachfor a nominal GDP of R300. This year it produces 60 units of output at a price ofR8,00 each. What is the percentage change in real GDP since the base year?(2)(a) 5%;(b) 10%;(c) 20%;(d) 15%.
14)Suppose that the annual rates of growth of real GDP of Econoland over a five-year period are as follows: Year Growth Rate (%) 1 3 2 1 3 – 2 4 4 5 5 Instructions: Round your answers to 2 decimal places. a. What was the average of these growth rates in Econoland over these 5 years? b. What term would economists use to describe what happened in year 3? (Click to select) Expansion Recession c. If the growth rate in year 3 had been a positive 2 percent rather than a negative 2 percent, what would have been the average growth rate?
4. How is GDP per capita calculated differently from labor productivity? 5. How do gains in labor productivity lead to gains in GDP per capita? 6. What is an aggregate production function? 7. What is capital deepening? 8. What do economists mean when they refer to improvements in technology? 9. For a high-income economy like the United States, what aggregate production function elements are most important in bringing about growth in GDP per capita? What about a middle-income country such as Brazil? A low- income country such as Niger? 10. List some arguments for and against the likelihood of convergence. 11. Say that the average worker in Canada has a productivity level of $30 per hour while the average worker in the United Kingdom has a productivity level of $25 per hour (both measured in U.S. dollars). Over the next five years. say that worker productivity in Canada grows at 1% per year while worker productivity in the UK grows 3% per year. After five years, who will have the higher…
Please note I have completed some of this myself, however I need you to finish it up. Thanks! Suppose that annual output in year 1 in a 3-good economy is 3 quarts of ice cream, 1 bottle of shampoo, and 3 jars of peanut butter. In year 2, the output mix changes to 5 quarts of ice cream, 2 bottles of shampoo, and 2 jars of peanut butter. If the prices in both years are $4 per quart for ice cream, $3 per bottle of shampoo, and $2 per jar of peanut butter, what was the economy’s nominal GDP in year 1? Show the calculation. Year one (3*$4)+(1*$3)=$12+$3+$6=$21 Recall that GDP is the core measure of an economy's health. Nominal GDP (also known as current–dollar economic statistics) is not adjusted to account for any price changes. To calculate nominal GDP (the value of all final goods and services evaluated at current-year prices) you have to use the formula: Nominal GDP= P*Q. To get a real picture of a nation's economic growth economists prefer using real GDP. To calculate real…
8) Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges wereproduced in 2002 and 4 in 2009, then real GDP (measured in 2002 prices) in 2009 was:a. $5.b. $6.50.
Assume an economy where there are two producers: a wheat producer and a bread producer. In agiven year, the wheat producer grows 3 million tonnes of wheat, of which 2.5 million tonnes aresold to the bread producer at $30 per bushel, and 0.5 million tonnes are stored by the wheatproducer to use as seed for next years crop. The bread producer produces and sells 100 millionloaves of bread to consumers for $3.50 per loaf. Determine GDP in this economy during this yearusing the product and expenditure approaches.
Learning Outcomes Covered: LO 2. Explain how the following key aggregate economic variables are defined and measured: the price level, national income, employment, unemployment, the labor force, the unemployment rate, the rate of inflation, the exchange rate. LO3. Understand how national expenditure and national product are measured and how the equilibrium level of national income is achieved. Graduate Attributes: Effective communication (1) Scholastic rigor and practical competence (2) Lifelong Learning (4) Autonomy and Accountability (5)
17) Suppose that work hours in New Zombie are 200 in year 1 and productivity is $14 per hour worked. Instructions: In part a, enter your answer as a whole number. In part b, round your answer to 2 decimal places. a. What is New Zombie’s real GDP? b. If work hours increase to 210 in year 2 and productivity rises to $16 per hour, what is New Zombie’s rate of economic growth?