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1. Nominal and Real GDP: Consider the data in the following table, which represents the total production of the country Byzantium, a country that produces only consumer goods. 2018 100 5 2019 2020 Quantity of Y Quantity of X Price of Y Price of X 105 103 3 $5 S105 4 S5 $110 $5 $100 a). Calculate normal GDP for all three years. b). Calculate real GDP for all three years, using 2018 as the base year. c). What are the growth rates based on normal and real GDP, respectively, between 2019 and 2020? Discuss why they are different.

1. Nominal and Real GDP: Consider the data in the following table, which represents the total production of the country Byzantium, a country that produces only consumer goods. 2018 100 5 2019 2020 Quantity of Y Quantity of X Price of Y Price of X 105 103 3 $5 S105 4 S5 $110 $5 $100 a). Calculate normal GDP for all three years. b). Calculate real GDP for all three years, using 2018 as the base year. c). What are the growth rates based on normal and real GDP, respectively, between 2019 and 2020? Discuss why they are different.

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Measuring A Nation's Income
Section: Chapter Questions
Problem 7QR
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1. Nominal and Real GDP Consider the data in the following table, which represents the total production of the country Byzantium, a country that produces only consumer goods. 2018 2019 2020 Quantity of Y Quantity of X Price of Y Price of X 100 105 103 5 3 4 $5 $5 $5 $105 $100 $110 a). Calculate normal GDP for all three years. b). Calculate real GDP for all three years, using 2018 as the base year. c). What are the growth rates based on normal and real GDP, respectively, between 2019 and 2020? Discuss why they are different.
Transcribed Image Text:1. Nominal and Real GDP Consider the data in the following table, which represents the total production of the country Byzantium, a country that produces only consumer goods. 2018 2019 2020 Quantity of Y Quantity of X Price of Y Price of X 100 105 103 5 3 4 $5 $5 $5 $105 $100 $110 a). Calculate normal GDP for all three years. b). Calculate real GDP for all three years, using 2018 as the base year. c). What are the growth rates based on normal and real GDP, respectively, between 2019 and 2020? Discuss why they are different.
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