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Unformatted text preview: = real GDP at the beginning of the year ? = change in prices during year = change in output during year We are told that nominal GDP at the end of the year, ( ? + ? )( + ), equals 1.10 times nominal GDP at the beginning of the year, ? . That is ( ? + ? )( + ) = 1 . 10 ? (4.42) Furthermore, the price level at the end of the year, ? + ? equals 1.05 times the price level of the start of year, ? : ? + ? = 1 . 05 ? Substituting this in equation (4.38) yields 1 . 05 ? ( + ) = 1 . 10 ? which can be solved to give = ( 1 . 10 1 . 05 1) = 0 . 0476 The growth rate of real GDP ( / ) is equal to 4.76 per cent. 207...
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This note was uploaded on 01/16/2012 for the course ECO 2024 taught by Professor Dr.dumond during the Fall '10 term at FSU.
- Fall '10