In order to find 2016 GDP in chained 2017 dollars, you would need to compute all but one of the following.  Which is unnecessary?Hints:  (1) start by writing an equation to show how 2016 GDP is related to 2017 GDP (in chained 2017 dollars).  If you are not sure how to do this, go back to the lecture slides or to the reading "Numerical Example of Chain Weighting."  (2) in the answers below, the phrase "in constant [year] dollars" refers to a fixed-weight calculation.  a) current-dollar GDP in 2017b) 2017 GDP in constant 2016 dollarsc) 2016 GDP in constant 2015 dollarsd) current-dollar GDP in 2016e) 2016 GDP in constant 2017 dollars

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Asked Jan 27, 2020
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In order to find 2016 GDP in chained 2017 dollars, you would need to compute all but one of the following.  Which is unnecessary?

Hints:  (1) start by writing an equation to show how 2016 GDP is related to 2017 GDP (in chained 2017 dollars).  If you are not sure how to do this, go back to the lecture slides or to the reading "Numerical Example of Chain Weighting."  (2) in the answers below, the phrase "in constant [year] dollars" refers to a fixed-weight calculation.  

a) current-dollar GDP in 2017
b) 2017 GDP in constant 2016 dollars
c) 2016 GDP in constant 2015 dollars
d) current-dollar GDP in 2016
e) 2016 GDP in constant 2017 dollars
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Expert Answer

Step 1

In order to calculate the 2016 GDP in chained 2017 dollars, the GDP for 2016 in current year prices, the GDP for 2017 in 2016 prices, GDP for 2017 in current year prices and GDP for 2016 in 2017 prices are calculated.

Step 2

The GDP growth rate for both the years is calculated in 2016 prices and 2017 prices separately. The average of the two growth rates is ...

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