Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 8, Problem 5RQ
To determine
Relevance of total GDP .
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Answer these questions about GDP: a. Could next year’s real GDP exceed next year’s nominal GDP?b. Could real GDP grow at the same time that real GDP per capita falls?c. Could people’s real consumption possibilities expand at the same time that realGDP per capita falls?d. How does changing amount of leisure complicate comparisons of real well-beingover time?
There are two economies. At the beginning of Year 1, their real GDPs are equal. Economy A grows at a constant rate of 4%, while Economy grows at a constant rate of 1%. Compute the ratio between the two economies real GDP after 10 years, 20 years and 30 years
5. In 2013, the average person’s income in Iceland was $41,000. This is an example of what type of economic measurement?
A. Real GDP
B. Per capita GDP
C. The rule of 72
D. Nominal GDP
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- Which one is correct? A/B/C/ Last year, North End Coffee Roasters Bangladesh opened a number of branches at different location of Dhaka city. This event- A. Increases current year’s GDP B. Increases current investment expenditure C. Current GDP remains unchanged.arrow_forward, assume the following: Karachi is an autonomous city. The only good/service produced at Karachi is Graduate education. year Karachi Grad std Price (tuition) Nominal GDP Real GDP (2015) Real GDP (2018) 2010 600 20000 2011 750 22000 2012 900 24000 2013 1100 25000 2014 1050 26000 2015 1300 29000 2016 1500 33000 2017 1600 36000 2018 1800 39000 2019 1750 43000 2020 1700 48000 Find the growth rate of nominal GDP for 2014, 2015 and 2016. Find the growth rate of real GDP (using 2017) for 2012, 2013 and 2014. Why are your answers in 2 and 3 different/same? Compute inflation using GDP deflator (using 2017) for 2012, 2013 and 2014. Beside GDP deflator what other price indices are used in measuring inflation? 7. Which one is the best? Why?arrow_forwardThe GDP in Mexico is $1.15 trillion. The rate of inflation is 2.5%. If the population of Mexico is $124,777.000, find the per capita GDP in this country. per capita GDP = $ ? Round to the nearest hundredth.arrow_forward
- Below 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_forwardPotential GDP is the value of real GDP when all the economy's factors of production - _____, _____, _____, and _____ - are fully _____. A. average costs; marginal costs; variable costs; fixed costs; minimized B. labor; capital; stocks; bonds; employed C. labor; capital; land; entrepreneurial ability; employed D. wages; rent; interest; profits; optimizedarrow_forwardDiscuss the positive contribution that the businesses have in growing the economy [8]arrow_forward
- 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) governmentarrow_forwardIf 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_forwardCase: Suppose you are watching a news report with a friend. The news report points out that a certain African nation generates a GDP per capita of only $1300 per year. Since your friend knows that Slovenia’s GDP per capita is approximately $26 000, he suggests that Slovenians are materially 20 times better off than the people of the African nation. 2. What general category of production is not captured by GDP in both the Slovenia and the African nation?arrow_forward
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