3) Using the GDP Deflator, calculate the following in (B) billions: Consumer Gov

Question

3) Using the GDP Deflator, calculate the following in (B) billions:

                  Consumer              Government                Investment                Net Exports

2017:           Q       P                    Q       P                       Q       P                      Q       P

                  10 B   $25.00            20 B   $5.00                15 B   $3.00              -3 B    $7.00

2016:          Q       P                    Q       P                       Q       P                      Q       P

                    8 B   $22.00            18 B   $4.00                12 B   $4.00              -2 B    $5.00

What is the GDP Deflator?

4) Give an estimate of actual 2017 GDP for China, Japan, Canada and Mexico, and compare it to the U.S. What is your analysis?

Explanation / Answer

3) The GDP deflator = GDP of 2017/GDP of 2016= ((10*25+20*5+15*3-(3*7))/(8*22+18*4+12*4-(2*5)))*100

= (374/286)*100 = 130.76

4)

China = $14.092 trillion

Japan = $4872137 million

Canada = $1653043 million

Mexico = $1149919 million

USA = $19.4854 trillion or $19485400 million

USA has the highest GDP when compared to China, Japan, Canada and Mexico

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