Answered: If nominal GDP increases by 2 percent…

If nominal GDP increases by 2 percent and the price level goes up by 3 percent next year, calculate next year's nominal GDP, price level, and real GDP.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter19: Measuring Economic Performance

Section: Chapter Questions

Problem 10P: Nominal GDP in Nowhereland in 2018 and 2019 is as follows: Can you say that the production of goods...

See similar textbooks

Related questions

Q: If nominal GDP increases from one year to the next, O prices real GDP or prices or both real GDP…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: If real GDP rises while nominal GDP falls, then prices on average have: risen. decreased and then…

A: Real GDP:- Real GDP is a measurement of all the commodities generated in a country after taking…

Q: your opinion, which economic indicator, nominal GDP, real GDP, or inflation, do you believe…

A: Real GDP provides a clearer picture of the state of the economy than nominal GDP and inflation.

Q: Why do economists use index numbers to measure the price level rather than dollar value of goods?

A: When an economy faces a continuous increase in the prices of all goods and services, it is said to…

Q: We learned that the calculates the LEI, while the calculates GDP. Bureau of Economic Analysis;…

A: NOTE: Since you have asked multiple questions we will be answering only the first one, if you need…

Q: (Nominal GDP) Which of the following is a necessary condition —something that must occur—for nominal…

A: GDP is a measurement of final goods and services produced within a given time period, typically a…

Q: Why is GDP (whether nominal or real) almost certainly an incomplete picture of how well an economy…

A: Nominal GDP is the value of goods and services produced in an economy in a year, measured at the…

Q: rom March 2003 until October 2007 the S & P stock index, a broad measure of stock market prices,…

A: The interest rate impacts inflation by implication by means of homegrown interest for labour and…

Q: The nominal GDP for an economy is $10 trillion. Real GDP is $9 trillion. What is the value of the…

A: The implicit price deflator help us to measure the level of price of all finished products and…

Q: GDP and CPI: Tracking the Macroeconomy- End of Chapter Problem Consider the following statement:…

A: Answer: Option B ( It doesn't account for price changes) Explanation: Nominal GDP = Quantity of…

Q: Q1. If the nominal GDP rises by 6 percent and the price level rises by 3 percent, then the real GDP…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: List some limitations of GDP as a perfect measure of economic wellbeing. How are each of the…

A: GDP or Gross Domestic Product refers to final market values of all goods and services produced in a…

Q: Assume that in year 1 an economy produces 10,000 units of output and they sell for $100 a unit, on…

A: Nominal GDP refers to the total value of goods and services produced in terms of money value. it is…

Q: A vertical curve means that any increase in GDP will result in which of the following for the…

A: When talking about real GDP and price level, a vertical curve explains the long-run aggregate supply…

Q: Why do economists use real GDP rather than nominal GDP to gauge economic well-being? Define "Real"…

A: The Gross Domestic Product is the summation of the money value of all the final goods and services…

Q: If nominal GDP is $10 trillion and real GDP is $8 trillion, the GDP deflator is: a. 80, and this…

A: The GDP price deflator estimates the progressions in prices for every one of the goods and services…

Q: Nominal GDP was $9,817 billion in 2000 and $21,433 billion in 2019. The chain-weighted price…

A: Real GDP is the GDP calculated at base year prices. The base year is decided by the institution of…

Q: Write the definition of GDP. b. Explain the three ways of measuring GDP. c. First, define nominal…

A: As per Keynesian economics, the GDP is the function of aggregate demand. It is indicated as follows:…

Q: If we denote nominal GDP as Y and nominal gross output as Z, what formulas would you use to…

A: Gross domestic product (GDP): - GDP is the market value of all final goods and services produced in…

Q: When we compare the difference between Nominal GDP and Real GDP we note A. Nominal GDP is always…

A: Real GDP is calculated on the basis of base or fixed year while current GDP is calculated on the…

Q: If your nominal income rose by 5.3 percent and the price level rose by 3.8 percent in some year, by…

A: Real income is income adjusted for inflation where nominal income does not account for price…

Q: Three goods are produced and consumed in an economy during years 1 and 2. The table shows prices (P1…

A: Real GDP is an inflation-adjusted measure that measures the value of goods and services produced in…

Q: You are trying to decide whether to use the GDP deflator or the CPI to calculate the inflation rate…

A: "Inflation is the rise in the price level of the economy." Over time, the price of goods and…

Q: How will you differentiate nominal GDP from real GDP? Which one (nominal or real) do you consider…

A: Every country focuses on its economic growth. Each country runs on its production, investment, and…

Q: Q.1.5 and Q.1.6 are based on the following information about an economy that produces the following…

A: Answer: Given: Price and quantity in 2018 (Base year): Price and quantity in 2019: Nominal GDP: it…

Q: In the first quarter of the year, Real GDP was $400 billion; in the second quarter, it was $398…

A: A recession is a macroeconomic term represents a substantial decrease in the overall economic output…

Q: What will be the value of Real GDP if the quantity is $31 and the price is $12?

A: Generally according to the question we can see that Quantity is = $31 Price is = $12 We have to find…

Q: GDP

A: All the goods and services’ values produced within a duration and inside the country’s boundary…

Q: Show how much changes in real income (or Real GDP) for each following cases. % (increase, A. Nominal…

A: " Since you have posted a question with multiple sub-parts, we shall answer the first sub-parts .…

Q: Three goods are produced and consumed in an economy during years 1 and 2. The table shows prices (P1…

A: Real GDP is basically an inflation-adjusted estimate of the value of goods and services generated in…

Q: When nominal GDP rises, we can be certain that... a) prices must have risen b) both prices…

A: Gross domestic product (GDP) measures the market value of final goods and services produced by an…

Q: If all quantities produced rise by 10%, while all prices fall by 10%, what happens to real GDP? What…

A: Here, it is given that all quantities increased by 10%, while all prices are decreased by 10% in the…

Q: Instructions: For parts a, c, d, and e, enter your responses as a percentage rounded to one decimal…

Q: If nominal GDP is $400, real GDP is $200, and the money supply is $100, then calculate price level

A: Nominal GDP = $400 Real GDP = $200 Money supply = $100

Q: Which statement best describes the Consumer Price Index? The Consumer Price Index measures inflation…

A: Consumer price index (CPI) is defined as average change in the prices of fixed baskets of goods. It…

Q: An economy produces two goods, x, and y. A year ago the price of x was $4 and the price of y was $6.…

A: A year ago the price of goods x = $4 A year ago the price of goods y = $6 Today the price of goods x…

Q: If nominal GDP is $120, real GDP is $100, then calculate the price level of an economy ?

A: Price level = Nominal GDP / Real GDP

Q: The nominal GDP for an economy is $10 trillion. Real GDP is $7 trillion. What is the value of the…

A: Nominal GDP = $10 trillion Real GDP = $7 trillion

Q: Show your work for the following questions.if nominal output rises from$240billion to $259…

A: Since we only answer up to 3 sub-parts we will answer the first 3. Please resubmit the question…

Q: You are trying to decide whether to use the GDP deflator or the CPI to calculate the inflation rate…

A: The measure that depicts the value of goods and services being produced in an economy within a…

Q: If real GDP has decreased, which of the following statements is always true? a. Nominal GDP is lower…

A: The market value of all final goods and services produced in the economic territory of the country…

Q: If nominal GDP for 2017 is $62 trillion and real GDP for 2017 is $46 trillion, then the GDP deflator…

A: The GDP deflator measures the changes in prices for all of the goods and services produced in an…

Q: 12. If _____ is rising, it likely means that the economy is shrinking. A. consumer spending B.…

A: GDP is the value of final goods and services produced in the economy within a given period of time

Q: Three goods are produced and consumed in an economy during years 1 and 2. The table shows prices (P1…

A: Nominal GDP is calculated including the effect of inflation at the current year prices. Real GDP is…

Question

Fill in the spots for next year

If nominal GDP increases by 2 percent and the price level goes up by 3 percent next
year, calculate next year's nominal GDP, price level, and real GDP.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

If your nominal income rose by 5.3 percent and the price level rose by 3.8 percent in some year, by what percentage would your real income (approximately) increase?
An economy has nominal GDP of $16,768 billion in year 1 and $17,419 billion in year 2. If real GDP is $15,710 billion in 2019 and $16,086 billion in year 2, by how much did the price level rise between year 1 and year 2? Give your answer in percentage terms, not decimals. Round your answer to two deciman place
Answer this question If your nominal income rose by 5.3 percent and the price level rose by 3.8 percent in some year, by what percentage would your real income (approximately) increase?
What is the level of nominal GDP in France this year? FRED tells you that the real GDP is chained in a specific year (this means that it is evaluated in terms of constant prices for that year). Note that the real GDP and the nominal GDP series cross at one point. Why does this happen? ANSWER FROM THE GARPH.
Assume that nominal income increases by 5% and the price level increases by 3%, which of the following is true? Real GDP must have decreased. The impact on real GDP is indeterminate. The percentage increase in real GDP must exceed the percentage increase in the price level. Real GDP increased by approximately 2%. If the price level increased by 3%, nominal GDP must increase by less than 3%, not by 5%.
The following data show nominal GDP and the appropriate price index for several years. Compute real GDP for each year and indicate whether you have “inflated” or “deflated” nominal GDP in finding real GDP. All GDP are in billions. Year Nominal GDP GDP Price level index Real GDP Inflated (I)Deflated (D)1 $120 120 _____ _____2 130 102 _____ _____3 150 85 _____ _____4 160 96 _____ _____5 180 112 _____ _____6 230 144 _____ _____
The following table shows the outputs and prices of three products A, B and C by a small economy in 2019, 2020 and 2021. 2019 2020 2021 Product price qty price qty price qty A $4 50 $5 55 $6 60 B $3 40 $5 42 $8 45 C $2 20 $3 25 $4 28 (A) Compute the nominal GDP, the real GDP and the GDP deflator in 2020 and 2021, taking 2019 as the base year. Using the GDP deflator, measure the inflation rate in the economy between 2019 and 2020, and also between 2020 and 2021. (B) A typical household consumes 3 units of A, 3 units of B and 2 units of C in 2019. Using 2019 as the base year, compute the CPI for 2020 and 2021 and the inflation rate between 2019 and 2020, and also between 2020 and 2021. Are the inflation rates computed from (b) the same as those computed from (a)? Why?
Show your work for the following questions.if nominal output rises from$240billion to $259 billion,and the GDP deflator rises from 100to105. a) what is the percentage increase in nominal output? b) what is the percentage increase in the price index? c) By how much does real output change? d) To what value would the deflator have had to rise for real income to remain constant? Please kindly answer all these questions
Assume that in year 1 an economy produces 10,000 units of output and they sell for $100 a unit, on average. In year 2, the economy produces the same 10,000 units of output, and sells it for $200 a unit, on average. What happened to the to nominal GDP and to real GDP between years 1 and 2? Why? Provide calculations of both nominal and real GDP for years 1 and 2
Consider an economy that produces 4 goods. Unless otherwise stated, 2017 is the base year. Quantity Price Product 2017 2018 2017 2018 A 5 7 $30 $40 B 6 4 $20 $40 C 8 12 $15 $20 D 3 5 $100 $110 Calculate nominal and real GDP for 2017 and 2018. What is the GDP deflator in 2017 and 2018? What is the corresponding annual growth rate of the economy and the annual inflation rate? Calculate the CPI for 2017 and 2018 (Hint: calculate the cost of the basket), as well as the annual CPI inflation rate. Why is GDP deflator inflation rate lower?
Suppose an economy produces and consumes only two goods, pastas, and books. The following table shows quantities consumed and prices for three years: 2019 (base year), 2020, and 2021. Make sure to show me how you compute the numbers and if you need a decimal number, round to one decimal. Year Price of Pasta Quantity of Pasta Price of Book Quantity of Book 2019 $4 80 $3 150 2020 $5 100 $4 200 2021 $6 200 $5 400 Question. What is the CPI basket of goods in this economy?
The Chairman of the Federal Reserve has made several announcements over the last few months related to its policy. In less than four sentences, explain how this policy change should impact the economy? You should mention the impact on the specific components of GDP.