1. Nominal output increased from $6.2 trillion to $9.0 trillion from 2003 to 201
ID: 1217642 • Letter: 1
Question
1. Nominal output increased from $6.2 trillion to $9.0 trillion from 2003 to 2010. The GDP deflator index rose from 160 to 200 in that time. By how much did real output change? Show work.
2. Calculate the following given the following information about an economy in 2010 2011, and 2012:
2012
2013
2014
Nominal GDP (in billions of dollars)
$3730
$4380
__7035____
GDP deflator (base year 2013)
97
105
Real GDP
______
_______
$6700
a. Nominal GDP in 2014._________
b. Real GDP in 2012 and 2013.__________ _________
c. Rate of inflation for 2013 __________
d. Growth rate in 2014. Give a percent change. ___________
2012
2013
2014
Nominal GDP (in billions of dollars)
$3730
$4380
__7035____
GDP deflator (base year 2013)
97
105
Real GDP
______
_______
$6700
Explanation / Answer
1. Real output in 2003 = (6.2 / 160) * 100 = 3.875 trillion
Real output in 2003 = (9.0 / 200) * 100 = 4.5 trillion
Real output change = (4.5 - 3.875) / 3.875 * 100 = 16.13%
2.(a) Nominal GDP in 2014 = (6700 * 105) / 100 = 7035
(b) Real GDP in 2012 = (3730 / 97) * 100 = 3845
Real GDP in 2012 = 4380
(c) Rate of inflation for 2013 = (100 - 100) / 100 = 0%
(d) Nominal GDP Growth rate in 2014 = (7035 - 4380)/4380 *100 = 60*61%
Real GDP Growth rate in 2014 = (6700 - 4380)/4380 *100 = 52.97%
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