Macroeconomics: Private and Public Choice
15th Edition
ISBN: 9781285453545
Author: Russell Sobel; Richard Stroup; James Gwartney; David Macpherson
Publisher: South-Western College Pub
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Chapter 7, Problem 2CQ
To determine
Determine the change in real GDP.
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If nominal GDP increased by 6 percent during a year, while the GDP deflator increased by 4 percent, by how much did real GDP change during the year?
How useful is GDP as a measure for countries' well-being and why? What other
measures could be included in comparing well-being across countries? If you were to
design an index to measure well-being in a country, what factors would you include
in the index?
If nominal GDP rose, does that mean that production had to increase as well? Why or why not? What about if real GDP increased? Why is it important to use real GDP when comparing changes over time?
Chapter 7 Solutions
Macroeconomics: Private and Public Choice
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Similar questions
- A car that is produces in 2012 is not sold until 2013. According the definition of GDP, in which year's GDP should it counted?arrow_forwardWhat components of GDP tend to decline significantly during recessions (particularly during the 2008 recession), and what GDP components rise during expansion?arrow_forwardWhat is GDP? What is real GDP ? What is per capita GDP ? Why is our GDP shrinking in the ongoing Corona Virus Crisis? What is a clear indication that the GDP will be decreasing?arrow_forward
- If a surfboard is produced this year but not sold until next year, how is it counted in this year's GDP and not next years?arrow_forwardWhat does the term "GDP" stand for in economics? a) Gross Domestic Product b) General Demand Principle c) Government Debt Payment d) Growth Development Planarrow_forwardComplete the table below calculating Real GDP for all years (show your work for at least one year!) and answer the following: Nominal GDP, Deflator, and Real GDP Year Nominal GDP (billions of dollars) GDP Deflator 7,000 8,350 9,740 10,120 11,111 12,582 Real GDP 2010 100 2011 111.3 2012 116.6 2013 107.5 2014 102.4 2015 109.7 a. By looking at the table, which year is the Base Year? Justify your answer! b. Calculate the Real GDP growth from 2010 to 2015. Show your work!arrow_forward
- What is the difference between GDP and Gross National Product (GNP)? Why do economists look at per capita measures of GDP and GNP when making comparisons between nations?arrow_forwardWhy could calculating GDP each year using current prices overstate or understate changes in actual output year to year?arrow_forwardWhy do you suppose that U.S. GDP is so much higher today than 50 or 100 years ago?arrow_forward
- Why might per capita GDP be only an imperfect measure of a country’s standard of living? What does GDP not tell us about the economy? Which of the following are included in GDP, and which are not?arrow_forwardHow could we increase GDP?arrow_forwardIf all quantities produced rise by 5 percent and all prices fall by 5 percent, why is nominal GDP unchanged?arrow_forward
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