Measuring GDP

# Measuring GDP - Show all Work! b) If the annual rate of...

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Measuring GDP, Real GDP, Implicit GDP Deflator, Rates of Growth and of Inflation In the land of Economia there are three final goods produced: Apples, Oranges, and Bananas. The quantities produced of these goods and their prices in the years 2001 and 2008 are listed below. Year Quantity of Oranges (Bushels) Quantity of Apples (Bushels) Quantity of Bananas (Bushels) Price of Oranges (\$/Bushel) Prince of Apples (\$/Bushel) Price of Bananas (\$/Bushel) 2001 100 150 200 10.00 8.00 8.00 2008 120 180 200 12.00 10.00 9.00 1) Assuming that 2001 is the base year, complete the following table: Year Gross Domestic Product Real Gross Domestic Product Implicit GDP Deflator 2001 2008 2) a) What is the annual rate of growth in real GDP between 2001 and 2008 in Economia?
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Unformatted text preview: Show all Work! b) If the annual rate of growth in real GDP remains the same as it was between 2001 and 2008, what will real GDP in Economia be in the year 2010? Show all work! 3) What was the annual rate of inflation in Economia between 2001 and 2008? Show all work! Determining rates of growth: Suppose a particular variable of interest has the value X t at time t, and X t+N at time t+N (N periods later). If we denote by ρ the per-period growth rate in this variable X, we have: X t+N = X t (1 + ρ ) N If we wish to determine ρ we may rearrange this expression as: ρ = [X t+N /X t ] 1/N- 1...
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## This note was uploaded on 02/07/2012 for the course ECON 252 taught by Professor Robertholand during the Fall '08 term at Purdue.

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