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# answerstohomework1summer2007 - Economics 302 Summer 2007...

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Economics 302 Summer 2007 Answers to Homework #1 Homework will be graded for content as well as neatness. Sloppy or illegible work will not receive full credit. This homework requires the use of Excel which is a spreadsheet program. 1. For this question assume that this economy produces only three kinds of goods: bikes, refrigerators, and chairs. The table below provides data on the sales and prices for these three goods for three different years. Year Number of Bikes Sold Price per Bike Number of Refrigerators Sold Price per refrigerator Number of Chairs Sold Price per Chair 1980 1000 \$100 1050 \$600 150 \$70 19980 1500 \$200 1500 \$400 400 \$50 2000 2000 \$350 5000 \$200 250 \$80 a. Using an Excel spreadsheet complete the following table: Year Nominal GDP Real GDP Using Real GDP Using 1980 as the Base 2000 as the Base Year Year 1980 \$740,500 \$740,500 \$572,000 1990 \$920,000 \$1,078,000 \$857,000 2000 \$1,720,000 \$3,217,500 \$1,720,000 b. Calculate the GDP deflator using first 1980 as the base year and then 2000 as the base year. Collect your findings in the following table. Year GDP Deflator GDP Deflator Using 1980 as Using 2000 as the Base Year the Base Year 1980 100 129.458042 1990 85.3432282 107.3512252 2000 53.45765346 100 2000 189.9186992 100 c. From the data you gathered in part (a), complete the following table. Hint: you may find it convenient to do this using Excel as well.

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Period Percentage Percentage Percentage Change in
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answerstohomework1summer2007 - Economics 302 Summer 2007...

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