MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 5, Problem 20SQ
To determine
The impact of increased production without increased inflation.
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a. The overall price level increased 50% from the year 2018 to 2019 in the country, and the price index is 100 in 2018, what is the value of price index in 2019? 3. b. Calculate the nominal and real GDP in 2018 and 2019 by taking 2018 as base year.3 c. Take 2019 as base year instead of 2018 and calculate the real GDP for 2018. Is the real GDP of the 2018 changes? Why?
Country Name
Year
Exports
Consumption
Investment
Net Exports
Government Expenditure
Imports
Cambodia
2018
61.315
75.209
23.341
-1.699
4.904
63.014
Cambodia
2019
67.209
81.655
26.660
-1.512
5.288
68.721
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 year
Terana’s nominal GDP rose from $260 billion in 2016 to $290 billion in 2017. During the same period, the inflation rate was 6%. Round your answers below to one decimal place. a. By what percentage did nominal GDP increase between 2016 and 2017? Nominal GDP increased by % between 2016 and 2017. b. By what percentage did real GDP increase between 2016 and 2017? Real GDP increased by % between 2016 and 2017.
Chapter 5 Solutions
MACROECONOMICS FOR TODAY
Ch. 5.6 - Prob. 1YTECh. 5 - Prob. 1SQPCh. 5 - Prob. 2SQPCh. 5 - Prob. 3SQPCh. 5 - Prob. 4SQPCh. 5 - Prob. 5SQPCh. 5 - Prob. 6SQPCh. 5 - Prob. 7SQPCh. 5 - Prob. 8SQPCh. 5 - Prob. 9SQP
Ch. 5 - Prob. 10SQPCh. 5 - Prob. 11SQPCh. 5 - Prob. 12SQPCh. 5 - Prob. 13SQPCh. 5 - Prob. 1SQCh. 5 - Prob. 2SQCh. 5 - Prob. 3SQCh. 5 - Prob. 4SQCh. 5 - Prob. 5SQCh. 5 - Prob. 6SQCh. 5 - Prob. 7SQCh. 5 - Prob. 8SQCh. 5 - Prob. 9SQCh. 5 - Prob. 10SQCh. 5 - Prob. 11SQCh. 5 - Prob. 12SQCh. 5 - Prob. 13SQCh. 5 - Prob. 14SQCh. 5 - Prob. 15SQCh. 5 - Prob. 16SQCh. 5 - Prob. 17SQCh. 5 - Prob. 18SQCh. 5 - Prob. 19SQCh. 5 - Prob. 20SQ
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- Nominal GDP in Nowhereland in 2018 and 2019 is as follows: Can you say that the production of goods and services in Nowhereland has increased between 2018 and 2019? Why or why not?arrow_forwardIf nominal GDP grows by 7% but inflation rises 3%, what is the real GDP?arrow_forwardIncreased production but not increased inflation will result ti higher real GDP why?arrow_forward
- 4. A country in which a large majority of the population resides and works outside the country is most likely a country in which...? a. the relationship between GDP and GNP cannot be determined b. GDP is roughly equal to GNP. c. GDP is much larger than GNP. d. GNP is much larger than GDP. 5. As the workforce ages, a. structural and frictional unemployment increase. b. cyclical unemployment declines. c. cyclical unemployment increases. d. the natural rate of unemployment declines.arrow_forwardIf the price level has been falling over time (i.e. deflation), and Nominal GDP has been increasing, then we would expect to see Real GDP... Growing at the same rate as Nominal GDP Not changing Growing slower than Nominal GDP Growing faster than Nominal GDParrow_forwarda. If nominal GDP rose, does that mean that production had to increase as well? Why or why not?An increase in nominal GDP means there must have been an increase in inputs. may have been due to an increase in the price level. means production must have increased. means production must have decreased.b. What about if real GDP increased?An increase in real GDP may have been due to an increase in the price level. means production must have increased because the price level is not held constant. means production must have decreased. means production must have increased because the price level is held constant.c. Why is it important to use real GDP when comparing changes over time?Changes in real GDP over time will accurately reflect changes in real production. should not be used. We should use changes in nominal GDP when analyzing changes over time. have a time lag, which helps us accurately predict business cycles. will include changes in the price level, which gives a complete picture.arrow_forward
- 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.arrow_forwarda) Give the definition of GDP and explain what items are not included in its calculation? What is the current environment in the USA and Australia?b) Define unemployment and its measurement. What is the current environment in the USA and Australia?c) Define inflation and its measurement. What is the current environment in the USAarrow_forwardLast year, nominal GDP was $5,000. Real GDP could be expressed as 250 flowerpots. Money supply was $200. How many transactions did an average dollar bill participate in?arrow_forward
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