{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

oooooook

# oooooook - Calculating Nominal GDP Real GDP and Changes in...

This preview shows pages 1–2. Sign up to view the full content.

Calculating Nominal GDP, Real GDP, and Changes in GDP Answer Key Consider the following data for the country of Fruitopia (prices are per bushel): Price, 2001 Quantity 2001 Price 2002 Quantity 2002 Apples \$10 5 Apples \$12 8 Oranges \$5 20 Oranges \$10 15 Peaches \$10 10 Peaches \$10 20 a. Calculate the nominal GDP for each of the two years. NGDP(2001) = ∑P01*Q01 = 10*5 + 5*20 + 10*10 = = \$250 NGDP(2002) = ∑P02*Q02 = 12*8 + 10*15 + 10*20 = \$446 b. Calculate the real GDP for each of the two years using 2001 as the base year. RGDP(2001) = ∑P01*Q01 = 10*5 + 5*20 + 10*10 = = \$250 RGDP(2002) = ∑P01*Q02 = 10*8 + 5*15 + 10*20 = \$355 c. What is the growth rate in real GDP from 2001 to 2002 using 2001 as the base year? Is real GDP growing or shrinking? RGDP(02) – RGDP(01) \$355 - \$250 105 G(1) = --------------------------------- * 100 = -------------------- * 100 = ------ * 100 RGDP(01) \$250 250 = 42.00% Real GDP grew 42.00% from 2001 to 2002 using 2001 as the base year d. Calculate the real GDP for each of the two years using 2002 as the base year. RGDP(2001) = ∑P02*Q01 = 12*5 + 10*20 + 10*10 = \$360 RGDP(2002) = ∑P02*Q02 = 12*8 + 10*15 + 10*20 = \$446 e. What is the growth rate in real GDP from 2001 to 2002 using 2002 as the base year? Is real GDP growing or shrinking?

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern