Chapter 11, Problem 12P

To determine

To fill in the blanks with calculations.

Answer to Problem 12P

125, $8000, $18000, $77008, $10000

Explanation of Solution

Year	GDP Deflator	Nominal GDP (in billions_	Real GDP (in billions)
2008	90.9	$7000	$77008
2009	100	$8000	$8000
2010	125	$10000	$8000
2011	140	$14000	$10000
2012	150	$18000	$12000

$GDPDeflatorfor2010,GDPDeflator=NominalGDP÷RealGDP\times 100$

$=10000÷80000\times 100$

$=125istheGDPDeflatorin2010$

$NominalGDPfor2009=x÷8000\times 100=100$

$=800,000x=100$

$=x=800,000÷100$

$=x=8000$

$Hence,NominalGDPfor2009is8000$

$NominalGDPfor2012=x÷12000\times 100=150$

$=1,200,000x=150$

$=x=1,200,000÷150$

$=x=8000$

$Hence,NominalGDPfor2012is8000$

$RealGDPfor2008=7000÷x\times 100=90.9$

$=700,000x=90.9$

$=x=700.,000÷90.9$

$=x=77,008$

$Hence,RealGDPfor2008is77,008$

$RealGDPfor2011= 14000÷x\times 100=140$

$= 1,400,000x=140$

$=x=1,400,000÷140$

$=x=10,000$

$Hence,RealGDPfor2011is10,000$

Economics Concept Introduction

Introduction:

The full form of GDP is gross national product and it is the way that measures the total economy's output of goods and services in the country. The Nominal GDP is the economy's output without the inflation adjustments. The Nominal GDP is usually higher than the real GDP as inflation is a positive number. Real GDP is inflation adjusted measure that has the value of goods and services produced by an economy in a particular given year.