Econ 162-A1, A2Kenny ChristiansonFall 2015due:October 23ANSWER KEY – PROBLEM SET NUMBER FIVE1. 1.a. GDP = C + I + G + (X - M) = 11,800 + 2900 + 3200 + (2300 - 2900) = $17,300b. GNP = GDP + NFIA = 17,300 + 300 = $17,600NNP = GNP – CCA = 17,600 – 2800 = $14,800c. NI = W + i + R + profits = 9300 + 1700 + 600 + 3400 = $15,000d. Statistical Discrepancy = NNP - NI = 14,800 – 15,000 = - $200check – GDP using the income approach: (not required)GDP = W + i + R + profits – NFIA + CCA + SDGDP = 9300 + 1700 + 600 + 3400 – 300 + 2800 - 200 = $17,3002. a.To find nominal GDP in year 1, multiply the quantity in year 1 times the price in year 1 andthen sum to find the total:YEAR 1goodquantitypriceQ1x P1rocks200$1$200socks200$2$400blocks200$3$600clocks200$4$800nominal GDP1=∑ Q1x P1=$2000b.If year 1 is the base year, then in year 1 nominal GDP = real GDP.The set of prices beingused to measure nominal GDP is the same as the set of prices being used to measure real GDP.So in year 1, real GDP1= nominal GDP1= $2000.c.To find nominal GDP in year 2, multiply the quantity in year 2 times the price in year 2 andthen sum to find the total:YEAR 2goodquantitypriceQ2x P2rocks150$4$600socks220$5$1100blocks400$2$800clocks300$6$1800nominal GDP2=∑ Q2x P2=$4300