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# wsnov - ECON 1000-100 Worksheet 7 GDP and Cost of Living 1...

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ECON 1000-100 Worksheet 7 GDP and Cost of Living 1.) Suppose the following table records the total output and prices for an entire economy. Further, suppose the base year is 2003. Year Price of Soda Q of Soda Price of Jeans Q of Jeans 2003 \$1.00 200 \$10.00 50 2004 \$1.10 220 \$11.00 50 a.) What is the value of nominal GDP in 2003? 2004? 2003 - \$700 2004 - \$792 b.) What is the value of real GDP in 2003? 2004? 2003 - \$700 2004-\$720 c.) What is the value of the GDP deflator in 2003? 2004? 2003 – 100 2004 - 110 d.) By what percentage did prices rise between 2003 and 2004? Was the increase in nominal GDP due mostly to price increases or an increase in real output? Both goods – 10%, Quantity of Soda rose by 10% but Q of jeans did not rise at all, so most of the increase is due to prices. 2.)Complete the table: Year Nominal GDP Real GDP GDP Deflator 1 \$100 100 2 \$120 120 3 \$150 125 a.) What is the base year? Year 1 b.) From year 1 to year 2, did real output rise or did prices rise? Explain. Prices rose 20% c.) From year 2 to 3, did real output rise or did prices rise? Explain.

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wsnov - ECON 1000-100 Worksheet 7 GDP and Cost of Living 1...

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