Lecture 7 1.23.08

Lecture 7 1.23.08 - Real vs Nominal GDP Nominal: calculate...

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Lecture 7 Nominal GDP – The market value of the final goods and services produced in a given year valued at the prices that prevailed in that same year Will Phan extra office hours Monday Jan 28 th Econ Bldg 304 10:30 – 12:30 p.m. Real GDP – The market value of final goods and services produced in a given year when valued at constant prices - Need one year to base the price from base year, one can see that any changes in GDP is from that year - Only changes when output changes, want to measure output, in contract nominal GDP changes year to year due to change in price
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Unformatted text preview: Real vs Nominal GDP Nominal: calculate using current year quantities and current year price Real GDP: calculate current year Q but base year prices. Chain-weighted Output index two p/2 An index that uses the prices of two adjacent years to calculate the growth rate of real GDp. GDP deflator = nominal GDP / Real GDP Price level the average of the prcies that ppl pay for all the goods and services that they buy as measure by a price index GDP deficitor the ave of current year prices as a % of base year prices....
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