Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971509
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 10, Problem 6CQQ
To determine
The impact of increase in quantity produced and price fall.
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If all quantities produced rise by 10 percent and all pricec fall by 10 percent, which of the following occurs?a.Real GDP rises by 10 percent,while nominal GDP falls by 10 percent.bReal GDP rise by 10 percent,while nominal gdp is unchanged.c.Real GDP is unchanged,while nominal GDP rises by 10 percent.d.Real GDP is unchanged,while nominal GDP falls by 10percent.
Examine the status of the economic welfare in Goodland Republic in 2018 based on your GDP deflator, nominal GDP and Real GDP. Also, explain the reasons why it is necessary to calculate real GDP. Show your work.
On the demand side of GDP, consumption by _____________ is the largest component of GDP, accounting for about two-thirds of the GDP in any year.
options
a) businesses
b) households
c) services
d) government
Chapter 10 Solutions
Principles of Macroeconomics (MindTap Course List)
Ch. 10.1 - Prob. 1QQCh. 10.2 - Prob. 2QQCh. 10.3 - Prob. 3QQCh. 10.4 - Prob. 4QQCh. 10.5 - Prob. 5QQCh. 10 - Prob. 1CQQCh. 10 - Prob. 2CQQCh. 10 - Prob. 3CQQCh. 10 - Prob. 4CQQCh. 10 - Prob. 5CQQ
Ch. 10 - Prob. 6CQQCh. 10 - Prob. 1QRCh. 10 - Prob. 2QRCh. 10 - Prob. 3QRCh. 10 - Prob. 4QRCh. 10 - Prob. 5QRCh. 10 - Prob. 6QRCh. 10 - Prob. 7QRCh. 10 - Prob. 8QRCh. 10 - Prob. 1PACh. 10 - Prob. 2PACh. 10 - Prob. 3PACh. 10 - Prob. 4PACh. 10 - Prob. 5PACh. 10 - Prob. 6PACh. 10 - Prob. 7PACh. 10 - Prob. 9PACh. 10 - Prob. 10PACh. 10 - Prob. 11PACh. 10 - Prob. 12PA
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- If nominal GDP increases by 5 percent a year and the GDP price index rises by 2 percent a year, then real GDP increases by _______. A. 2.5 percent a year B. 3 percent a year C. 7 percent a year D. 10 percent a yeararrow_forwardI am learning how the gross domestic product (GDP), how it is defined and measurable. Why do economists focus on the GDP, inflation, and unemployment when assessing the health of the entire economy. How does is the GDP defined and measured. Chapter 6 and 7 in intro to macroeconomicsarrow_forwardBelow are some data from the land of milk and honey:Year Price of MilkQuantity of Milk (Quarts)Price of HoneyQuantity of Honey (Quarts)2007 $1 100 $2 502008 $1 200 $2 1002009 $2 200 $4 100Using 2009 as the base year:d. Compute the growth in nominal GDP. e. Compute the growth in real GDP.f. Did economic well-being rise more in 2008 or 2009? Explainarrow_forward
- Part A. What is the difference between GDP and Real GDP? Which is a better measure of well-being? Why? Part B. What is GDP per capital?arrow_forwardItem Year 1 Year 2 Apples 20,000 @ $0.25 each 30,000 @ $0.30 each Bicycles 700 @ $800 each 700 @ $850 each Apps 10,000 @ $1.00 each 12,000 @ $2.00 each By what percentage did nominal GDP change between Year 1 and Year 2 and compute real GDP in Year 2 by using the prices of Year 1. By what percentage did real GDP change between Year 1 and Year 2?arrow_forward4. Compute the percentage increase in real GDP from 2004 to 2005.a. 0 percentb. 7 percentc. 22 percentd. 27 percent *base year is 2003arrow_forward
- 4. a mechanic builds an engine and then sells it to a customized body shop for $7,000. the body shop installs the engine in a carand sells the car to a dealer for $20,000. the dealer then sells the finished vehicle for $35,000. a consumer drives off with the car. By how much GDP increase? what is the value added at each step of the production process? How does the total value added compare with the amount by which GDP increased?arrow_forwardIf a pizza maker pays $1 for tomatoes, $1 for cheese, $2 for pepperoni and sells the pizza made with these ingredients for $7, then each pizza sold contributes how much to GDP?arrow_forward1.Real GDP is a more perfect measure of an economy's production than nominal GDP. Explain 2. Economists prefer to compare Real GDP figures for different years instead of comparing GDP figures.arrow_forward
- If all quantities produced rise by 10%, while all prices fall by 10%, what happens to real GDP? What happens to nominal GDP?arrow_forward3 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 countryarrow_forward
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