5. If nominal GDP was $11,500 billion in 2003 and the price level in 2003 was 111.6, then real GDP would havebeen approximatelya. $9,795 billion.b. $10,305 billion.c. $10,485 billion.d. $9,750 billion.1

here we calculate the real GDP and choose the correct option below which are as follow-

Answered: 5. If nominal GDP was $11,500 billion…

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 6QR

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1. A. Is nominal GDP a flow variable? B. Is real GDP a flow variable? C. Is labor force a stock variable? D. Is exports a stock variable?
3 Which of the following is correct about real GDP? a. All of the options b. It is corrected for inflation c. It is GDP calculated at constant price level d. It shows true picture about the output of a country
4. Compute the percentage increase in real GDP from 2004 to 2005.a. 0 percentb. 7 percentc. 22 percentd. 27 percent *base year is 2003
Suppose that over the last three years, there has been a 10% increase in real GDP, but a 5% increase in nominal GDP, we might conclude thata) The economy has entered a recession.b) The price level has increased, with 5% inflation.c) The price level has decreased, with 5% deflation.d) The economy has experienced a combination of low growth and inflation.
Suppose the Federal Reserve begins to Increase the supply of money at an Increasing rate. What Impact would that have on GDP, unemployment, and inflation?
What are the main components of measuring GDP with what is demanded?
China’s real GDP increased 6.9 percent in the first quarter of 2017 from a year earlier.Investment grew by 9.2 percent and retail sales by 10.9 percent. In current prices, GDPincreased by 11.8 percent from a year earlier.1. Explain how China’s real GDP can grow at a 6.9 percent rate when consumption andinvestment grew faster than 6.9 percent. 2. Explain why the growth rate of GDP in current prices does not provide informationabout how quickly the economy is really growing.
3. (National Income Accounting) Explain why intermediate goods and services usually are not included directly in GDP. Are there any circumstances under which they would be included directly? 4. (Nominal GDP) Which of the following is a necessary condition —something that must occur—for nominal GDP to rise? Explain your answers. a. Actual production must increase. b. The price level must increase. c. Real GDP must increase. d. Both the price level and actual production must increase. e. Either the price level or real GDP must increase 5. (Price Indexes) E-readers and HDTVs have not been part of the U.S. economy for very long. Both goods have been decreasing in price and improving in quality. What problems does this pose for people who are responsible for calculating a price index? 6. (Consumer Price Index) One form of the CPI that has been advocated by lobbying groups is a “CPI for the elderly.” The Bureau of Labor Statistics currently produces only indexes for “all urban…
1 a)What is the value added definition of GDP? What is meant by value added? b) Suppose that in a given year, a company spends € 400 million on intermediate goods, €800 million on wages of employees with no other expenses and makes total sales worth of € 1600 million. What is the value added of this company? c) The government wants to increase absolute savings and successfully incentivizes the people to save more (saving rate goes up). Show is a graph, what happens to equilibrium output. How could increase in savings lead to a paradox. 2.) a) What are the elements within autonomous spending? State the formula for the multiplier b)In the graph below, draw the demand function (Z) including autonomous expenditure. Label the area representing autonomous spending. Add the value of equilibrium output that you calculated in part c. ( images) c)Suppose the following characteristics of an economy: C = 150 + 0.4 YD , I = 270, G = 100, T = 50 Calculate the equilibrium output and mark it…
a. If nominal GDP rose, does that mean that production had to increase as well? Why or why not?An increase in nominal GDP means there must have been an increase in inputs. may have been due to an increase in the price level. means production must have increased. means production must have decreased.b. What about if real GDP increased?An increase in real GDP may have been due to an increase in the price level. means production must have increased because the price level is not held constant. means production must have decreased. means production must have increased because the price level is held constant.c. Why is it important to use real GDP when comparing changes over time?Changes in real GDP over time will accurately reflect changes in real production. should not be used. We should use changes in nominal GDP when analyzing changes over time. have a time lag, which helps us accurately predict business cycles. will include changes in the price level, which gives a complete picture.
4. Explain how an increase in your nominal income and a decrease in your real income might occur simultaneously.
10) Suppose net taxes are $50 billion. Government spending is $125 billion. Investment is $50 billion and consumption is $100 billion. What is national savings? A) 50 billion B) -50 billion C) 75 billion D) -75 billion.

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5. If nominal GDP was $11,500 billion in 2003 and the price level in 2003 was 111.6, then real GDP would have been approximately a. $9,795 billion. b. $10,305 billion. $10,485 billion. d. $9,750 billion. C.