nd of Chapter 3.7 GDP Deflator Real GDP Percentage GOP Defiator Real GDP Percent

Question

nd of Chapter 3.7 GDP Deflator Real GDP Percentage GOP Defiator Real GDP Percentage Nominal (base year-(base year change in real (base year. (base year change in GDP -2016) 2018) 2018)real GDP 2014 $980.00 2015 1,020.00 92 90.9 2016 1,050.00 100 2017 1200.00 105 2018 1.400.00 100 s Fill in Column (4) by calculating real GOP using the GDP deflator with a base year of 2016 from Column (3) (7) by calculating real GDP using the GDP deflator with a base year of 2018 from Column (6). Fill in (8) by calculating the annual percentage change in real GOP for each year using the values from Column (6). in

Explanation / Answer

GDP Deflator =( Nominal GDP/Real GDP) 100

Real GDP = (Nominal GDP/ GDP Deflator) 100

Percentage change in real GDP = [(Real GDP in the current year - real GDP in the previous year )/Real GDP in the Previous year ] 100

Now, by applying these formulae in the table we get,

YEAR Nominal GDP GDP Deflator (Base year=2016) Real GDP (Base Year=2016) Percentage change in real GDP GDP Deflator (base year=2018) Real GDP (base year =2018) Percentage change in real GDP 2014 $980 90 $1088.88 - 81.8 $1198.04 - 2015 $1020 92 $1108.6 [(1108.6 -1088.88)/1088.88] 100 = 1.81 83.6 $1220.09 1.84 2016 $1050 100 $1050 -5.28 90.9 $1155.11 -5.32 2017 $1200 105 $1142.85 8.84 95.5 $1256.54 8.78 2018 $1400 110 1272.72 11.36 100 $1400 11.41

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