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EXTRA CREDIT 2

# EXTRA CREDIT 2 - NAME ZI WANG Extra credit assignment#2...

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ZI WANG Extra credit assignment #2 Directions: Please print your answers in blue font . This assignment is due on Thursday March 18 th at 12pm. You must submit your electronic copy to Blackboard’s digital drop-box. No late homework accepted! 1. Refer to the following table: Year Price of Quantity of Price of Quantity of Beer Pints Beer Pints Burritos Burritos 2006 \$2 1000 \$3 500 2007 \$3 1500 \$4 1000 2008 \$4 2000 \$5 1500 2009 \$5 2300 \$6 1800 a) Calculate the nominal GDP for the four years. 2006: 2*1000+3*500=3500 2007: 3*1500+4*1000=8500 2008: 4*2000+5*1500=15500 2009: 5*2300+6*1800=22300 b) Calculate the real GDP for the four years (base year 2007) 2006: 3*1000+4*500=5000 2007: 3*1500+4*1000=8500 2008: 3*2000+4*1500=12000 2009: 3*2300+4*1800=14100 c) Calculate the GDP deflator for each of the four years 2006: 3500/5000=0.7 2007: 8500/8500=1 2008: 15500/12000=1.29 2009: 22300/14100=1.58 d) Calculate the nominal GDP growth rate between the years 2006 – 2007, 2007 – 2008 and 2006 – 2007: (8500-3500)/3500=1.43 2007 – 2008: (15500-8500)/8500=0.82 2008 – 2009: (22300-15500)/15500=0.44 e) Calculate the real GDP growth rate from 06-07, 07-08, 08-09 and 06-09 06-07: (8500-5000)/5000=0.7 07-08: (12000-8500)/8500=0.41 08-09: (14100-12000)/12000=0.175 06-09: (14100-5000)/5000=1.82 f) How much did prices increase from 06-09? \$3 for Beer Pints, \$3 for Burritos.

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EXTRA CREDIT 2 - NAME ZI WANG Extra credit assignment#2...

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