1. Suppose people consume 3 different goods. The following table shows the prices and quantities of each good consumed in 2019, 2020, and 2021. Year Price of Pizza 2019 $8 2020 $10 2021 $ 13 Quantity of Price of Pizza Burger 350 500 700 $ 10 $12 $ 14 Quantity of Burger 200 250 400 a. Calculate nominal GDP in each of the three years. Price of coffee Quantity of Coffee $8 $ 10 $15 150 250 400 b. Calculate Real GDP in each of the three years, using 2019 as the base year. c. Calculate the rate of inflation for 2020 and 2021 using the GDP deflator as your price index. Assume that 2019 is still the base year.
1. Suppose people consume 3 different goods. The following table shows the prices and quantities of each good consumed in 2019, 2020, and 2021. Year Price of Pizza 2019 $8 2020 $10 2021 $ 13 Quantity of Price of Pizza Burger 350 500 700 $ 10 $12 $ 14 Quantity of Burger 200 250 400 a. Calculate nominal GDP in each of the three years. Price of coffee Quantity of Coffee $8 $ 10 $15 150 250 400 b. Calculate Real GDP in each of the three years, using 2019 as the base year. c. Calculate the rate of inflation for 2020 and 2021 using the GDP deflator as your price index. Assume that 2019 is still the base year.
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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Transcribed Image Text:1. Suppose people consume 3 different goods. The following table shows the prices and quantities
of each good consumed in 2019, 2020, and 2021.
Year Price of
Pizza
2019 $8
2020 $ 10
2021 $ 13
Quantity of Price of
Pizza
Burger
350
500
700
$10
$12
$ 14
Quantity of
Burger
200
250
400
a. Calculate nominal GDP in each of the three years.
e. Using the CPI calculate the rate of inflation.
Price of coffee Quantity of
Coffee
$8
$ 10
$15
b. Calculate Real GDP in each of the three years, using 2019 as the base year.
c. Calculate the rate of inflation for 2020 and 2021 using the GDP deflator as your price index.
Assume that 2019 is still the base year.
d.
Using the quantities from 2019 for your market basket, and 2019 as your base
the CPI for 2019, 2020 and 2021.
150
250
400
year, calculate
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answer part c, d, and e
Transcribed Image Text:1. Suppose people consume 3 different goods. The following table shows the prices and quantities
of each good consumed in 2019, 2020, and 2021.
Year Price of
Pizza
2019 $8
2020 $ 10
2021 $ 13
Quantity of Price of
Pizza
Burger
350
500
700
$10
$12
$ 14
Quantity of
Burger
200
250
400
a. Calculate nominal GDP in each of the three years.
e. Using the CPI calculate the rate of inflation.
Price of coffee Quantity of
Coffee
$8
$ 10
$15
b. Calculate Real GDP in each of the three years, using 2019 as the base year.
c. Calculate the rate of inflation for 2020 and 2021 using the GDP deflator as your price index.
Assume that 2019 is still the base year.
d.
Using the quantities from 2019 for your market basket, and 2019 as your base
the CPI for 2019, 2020 and 2021.
150
250
400
year, calculate
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