GDP deflator = (Nominal GDP/Real GDP) x 100 Nominal GDP = Current Price x Current Quantity Nominal GDP (2020) = 10 x 4,000 + 30 x 1,000 = 40,000+30,000 = 70,000 Nominal GDP (2021) = 12 x 6,000 + 50 x 1,200 = 72,000 + 60,000 = 132,000 Real GDP = Base year price x Current Quantity Real GDP (2020) = 10 x 4,000 + 30 x 1,000 = 40,000 + 30,000 = 70,000 Real GDP (2021) = 1..
GDP deflator = (Nominal GDP/Real GDP) x 100 Nominal GDP = Current Price x Current Quantity Nominal GDP (2020) = 10 x 4,000 + 30 x 1,000 = 40,000+30,000 = 70,000 Nominal GDP (2021) = 12 x 6,000 + 50 x 1,200 = 72,000 + 60,000 = 132,000 Real GDP = Base year price x Current Quantity Real GDP (2020) = 10 x 4,000 + 30 x 1,000 = 40,000 + 30,000 = 70,000 Real GDP (2021) = 1..
Chapter15: Gross Domestic Product
Section: Chapter Questions
Problem 8SQ
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Question
Nominal GDP = Current Price x Current Quantity
Nominal GDP (2020) = 10 x 4,000 + 30 x 1,000 = 40,000+30,000 = 70,000
Nominal GDP (2021) = 12 x 6,000 + 50 x 1,200 = 72,000 + 60,000 = 132,000
Real GDP = Base year price x Current Quantity
Real GDP (2020) = 10 x 4,000 + 30 x 1,000 = 40,000 + 30,000 = 70,000
Real GDP (2021) = 1..
Expert Solution
Step 1
Given information:
Nominal GDP2020 = 70,000
Nominal GDP2021 = 132,000
Real GDP2020 =70,000
The formula for calculating GDP deflator is given below.
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ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
