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Unformatted text preview: our case is 2000. g) Nominal GDP measures the final value of domestically produced goods and services using current prices. The real GDP measures the final value domestically produced goods and services at constant prices (i.e using prices from a given base year). The reason why nominal GDP is higher than real GDP is because prices have increased since the base year of 2000. h) Quarterly growth rate in real GDP expressed at annual rate tells us what the annual change would be if the quarter's pace of growth/contraction continued for a year. It is calculated as quarterly growth rate multiplied by four (because there are four quarters in a year). The average growth rate of GDP over the past thirty years or so was 3.1%. (See textbook Chapter 1, page 4). 2008/1 st Q growth rate at annual rate = 1.06%; BELOW 2008/2 nd Q growth rate at annual rate = 2.76%; BELOW 8. 0.0909 or 9.09%. See textbook page 26....
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 Fall '09
 ChristinaNagy

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