KnowlesElizabeth_Chapter2Problems281

KnowlesElizabeth_Chapter2Problems281 - Elizabeth Knowles...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Elizabeth Knowles Week 1 Chapter 2 Chapter 2 Problem 2 Page 53 & 54 A. Nominal GDP is the total value of goods and services in current prices. Therefore, for year one the nominal GDP is $574,000. For year two, the nominal GDP is $608,000. Year One 20,000*0.25+700*800+6,000*1.5 5,000+560,000+9,000 574,000 Year Two 30,000*.3+650*900+7,000*2 9,000+585,000+14,000 608,000 B. Nominal GDP increased by 5.9 percent between year one and year two. 608000-574000/574000=0.0592 *100=5.92 C. Real GDP is the inflation adjusted value of GDP, measured in constant prices. The question says that the prices in year one are the actual value of the products.Therefore, for year one the real GDP is also $574,000 (see calculation above). For year two, the real GDP is $538,000. Year Two 30,000*.25+650*800+7,000*1.50 7500+520,000+10,500 538,000 D.The real GDP has decreased about 6.3 percent from year one to year two....
View Full Document

This note was uploaded on 05/27/2008 for the course ECO 120 taught by Professor Spangler during the Spring '08 term at VCCS.

Page1 / 3

KnowlesElizabeth_Chapter2Problems281 - Elizabeth Knowles...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online