YEAR P of Shoes Q of Shoes P of Hammers Q of Hammers 2010 $5 400 $2 50 2011 $6 4
ID: 1180157 • Letter: Y
Question
YEAR
P of Shoes
Q of Shoes
P of Hammers
Q of Hammers
2010
$5
400
$2
50
2011
$6
400
$2
100
2012
$7
400
$3
100
a) What is the Nominal GDP for each year?
2010: $ 2100 2011: $ 2600 2012: $ 3100
b) What is Real GDP for each year using 2011 as the base year?
2010: $ 2410 2011: $2600 2012: $2700
c) What is the GDP deflator for each year?
2010: 87.136 2011:100 2012: 114.8
d) Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2010 and 2011 from the previous year.
NOMINAL: 2010 to 2011: %23.8 2011 to 2012: %19.23
REAL: 2010 to 2011: %7.88 2011 to 2012: %2.8
DEFLATOR: 2010 to 2011:% 14.7 2011 to 2012: % 14.8
this is my question :
e) Did economic well being rise more from 2010 to 2011 or from 2011 to 2012? Why?
YEAR
P of Shoes
Q of Shoes
P of Hammers
Q of Hammers
2010
$5
400
$2
50
2011
$6
400
$2
100
2012
$7
400
$3
100
Explanation / Answer
GDP deflator (implicit price deflator for GDP) is a measure of the level of prices of all new, domestically produced, final goods and services in an economy.
Real Gross Domestic Product (real GDP) is a measure of the value of economic output adjusted for price changes
In this case real gdp(actual gdp) increase more between 2010 to 2011 than 2011 to 2012 and gdp deflator(price levels) increases in 2011 to 2012 than 2010 to 2011 so it is clear that economic well being rise more from 2010 to 2011 or from 2011 to 2012
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