Nominal GDP and Real GDP.

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Answer 1

Question

Chapter 8, Problem 8.3.5PA

Subpart (a):

To determine

Nominal GDP and Real GDP.

Subpart (b):

To determine

Nominal GDP and Real GDP.

Subpart (c):

To determine

Nominal GDP and Real GDP.

Subpart (d):

To determine

Nominal GDP and Real GDP.

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1. According to the BEA, in the second quarter of 2012 personal consumption expenditures grew by 1.7 percent, gross private domestic investment grew by 3.0 percent, government expenditure on goods and services decreased by -0.9 percent, imports grew by 2.9%, and exports grew by 6.0%. Given these data, it is most likely that A) GDP growth was positive in the 2nd quarter. B) GDP growth was negative in the 2nd quarter. C) the economy hit a business cycle peak. D) the economy hit a business cycle trough. 2. In the national income accounts, government expenditure on goods and services exclude A) transfer payments. B) state and local government purchases. C) local government purchases but include state government purchases. D) spending on national defense. 3. Transfer payments A) are included in the government expenditure category in gross domestic product. B) refer to all payments made to households by governments. C) refer to payments made by the government that are not made to…

20. If both the production of goods and services increase and prices rise, then the change in nominal GDP a. either understates or might accurately reflect the change in production. b. More information is needed to determine how the change in nominal GDP compares to the change in production. c. definitely accurately reflect the change in production. d. definitely overstates the change in production. e. definitely understates the change in production.

Assume a hypothetical economy that produces only one good – Peanut Butter. In year 1, the quantity produced is 4 packs and the price is Rs.400 per pack. In year 2, the quantity produced is 5 packs and the price is Rs.500 per pack. In year 3, the quantity produced is 6 packs and the price is Rs.600 per pack. Year 1 is the base year. A) What is nominal GDP for each of these three years? B) What is real GDP for each of these years? C) What is the GDP deflator for each of these years? D) What is the percentage growth rate of real GDP from year 2 to year 3? E) What is the inflation rate as measured by the GDP deflator from year 2 to year 3? F) In this one-good economy, how might you have answered parts (d) and (e) without first answering parts (b) and (c)?

Answer 2

Question

Chapter 8, Problem 8.3.5PA

Subpart (a):

To determine

Nominal GDP and Real GDP.

Subpart (b):

To determine

Nominal GDP and Real GDP.

Subpart (c):

To determine

Nominal GDP and Real GDP.

Subpart (d):

To determine

Nominal GDP and Real GDP.

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Answer 3

Question

Chapter 8, Problem 8.3.5PA

Subpart (a):

To determine

Nominal GDP and Real GDP.

Subpart (b):

To determine

Nominal GDP and Real GDP.

Subpart (c):

To determine

Nominal GDP and Real GDP.

Subpart (d):

To determine

Nominal GDP and Real GDP.

Expert Solution & Answer

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Answer 4

Question

Chapter 8, Problem 8.3.5PA

Subpart (a):

To determine

Nominal GDP and Real GDP.

Subpart (b):

To determine

Nominal GDP and Real GDP.

Subpart (c):

To determine

Nominal GDP and Real GDP.

Subpart (d):

To determine

Nominal GDP and Real GDP.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 8.3.5PA

Subpart (a):

To determine

Nominal GDP and Real GDP.

Subpart (b):

To determine

Nominal GDP and Real GDP.

Subpart (c):

To determine

Nominal GDP and Real GDP.

Subpart (d):

To determine

Nominal GDP and Real GDP.

Answer 6

Chapter 8, Problem 8.3.5PA

Subpart (a):

To determine

Nominal GDP and Real GDP.

Answer 7

Chapter 8, Problem 8.3.5PA

Subpart (a):

To determine

Nominal GDP and Real GDP.

Answer 8

Subpart (b):

To determine

Nominal GDP and Real GDP.

Answer 9

Subpart (b):

To determine

Nominal GDP and Real GDP.

Answer 10

Subpart (c):

To determine

Nominal GDP and Real GDP.

Answer 11

Subpart (c):

To determine

Nominal GDP and Real GDP.

Answer 12

Subpart (d):

To determine

Nominal GDP and Real GDP.

Answer 13

Subpart (d):

To determine

Nominal GDP and Real GDP.

Answer 14

Expert Solution & Answer

Answer 15

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Answer 16

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Answer 17

Ch. 8 - Prob. 8.1.1RQ Ch. 8 - Prob. 8.1.3RQ Ch. 8 - Prob. 8.1.4RQ Ch. 8 - Prob. 8.1.5RQ Ch. 8 - Prob. 8.1.6PA Ch. 8 - Prob. 8.1.7PA Ch. 8 - Prob. 8.1.8PA Ch. 8 - Prob. 8.1.9PA Ch. 8 - Prob. 8.1.10PA Ch. 8 - Prob. 8.1.11PA

Nominal GDP and Real GDP.

Solution Summary: The author explains that nominal GDP is the market value of all final goods and services produced in an economy during an accounting year, measured in current prices.

Nominal GDP and Real GDP.

Nominal GDP and Real GDP.

Nominal GDP and Real GDP.

Nominal GDP and Real GDP.

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Chapter 8 Solutions