nominal GDP, real GDP, the GDP deflator (a Paasche price index) and the CPI (a Laspeyres price index). For the CPI, assume that the representative basket of goods is exactly the one produced in the year 2007 Answer: To calculate nominal GDP for 2007 is $20, 000 ∗ 100 + $1.25 ∗ 400, 000 + $2 ∗ 100, 000 = $2, 000, 000 + $500, 000 + $200, 000 = $2, 700, 000 for 2008 $21, 000 ∗ 120 + $1.50 ∗ 380, 000 + $2.1 ∗ 115, 000 = $2, 520, 000 + $570, 000 + $241, 500 = $3, 331, 500 To calculate real GDP for 2007
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$10.50 $11 75 85 90 $15,000 $16,000 $15,500 50,000 60,000 45,000 $4 $4.50 $5 a) Using 2009 as base year, calculate nominal and real GDP per capita for 2009, 2010 and 2011. b) Keeping 2009 as base year for prices, compute Utopia’s inflation rates for 2010 and 2011 using both the CPI and the GDP deflator. When calculating the CPI, assume that the representative consumer purchases in any given year 10 T -shirts, 1 car and 100 pineapples. c) Explain why the computed inflation
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Fundamental of Macroeconomics This subject Macroeconomics fundamentals shows each individual how to focus more on how decisions make everyone on an equal level for each person and also by corporations, businesses, and government has Macroeconomics the studying types of behavior dealing with relation concerning the aggregate economics, and learning economy of situation known as making a difference about unemployment, income rates of higher levels, and several various different factors (Investopedia
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Measuring the Cost of Living Overview: Last time we discussed the most important measure of economic well-being – real, per capita GDP. Further, if we want to see how our economic well-being is changing over time, we can calculate how real GDP is changing in percentage terms (for example, real GDP grew 4% last quarter). Now, we turn our attention to another important measure of the economy. We want to measure how the cost of living changes over time. The main intuition here is that
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Real GDP vs. Nominal GDP Real GDP is GDP adjusted for changes in the price level and Nominal GDP is GDP expressed at current prices and it is often called money GDP (Gwarthney, pg. 732 & 734). Both the Real GDP and Nominal GDP are from the GDP deflator which is measurements of money and power that are the effects of inflation. The Real GDP is the measurements of significant of price changes and Nominal GDP is the measurements of inflation. We need both Real GDP and Nominal GDP because both
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Analysis on M2 & CPI of China, 1990-2014 The chart below demonstrates the broad money (M2) and Consumer Price Index (CPI) of China during the period of 1990 to 2014. The data is picked from the official website of the National Bureau of Statistics of China. (Data source: National Bureau of Statistics of China) According to the graph, both two figures show an uptrend in last three decades, and they shows a positive correlation. The M2 of 1990 was only about 1,500 billion yuan, and it increased
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How Exports impact GDP Tiffany Cook March 19, 2015 Econ 214 (gwartney, 2015) “Gross domestic import is the market values of all final goods and sales” There are various factors that make up the subcategories of the United States, Gross domestic product. This definition tells us how we ultimately arrive at a calculations of the gross domestic products, but it does not shed light on the economies output and input and the benefits or setbacks each service may have. Some ways that we can look
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Econ201 Macro-economy Spring 2013 Wesam Almadani LAG140 Table of Content Overall state of Economy in Saudi Arabia Demographic profile of Saudi Arabia GDP in Saudi Arabia CPI and Inflation Rate in Saudi Arabia Unemployment Rate in Saudi Arabia Economic problems in Saudi Arabia Economy in Saudi Arabia Saudi Arabia is the largest Arabian Country which is located in southwest Asia. It clenches the largest free market economy in the Middle East and North
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The gross domestic product (GDP) is one of the main indicators used to measure the health of a country’s economy. Economists measure growth with changes in real gross domestic gross domestic product (real GDP)---the market value of final goods and services produced in economy stated in the prices of a given year (McGraw-Hill 155). In plain simple terms gross domestic product is the economic report card of the United States. The parts that make up GDP are: Growth where when production
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engineer eats the bread. What is the value added by each person? What is GDP? Farmer’s VA = $1 Miller’s VA = $2 Baker’s VA = $3 GDP = $6 3. Suppose a woman marries her butler. After they are married, her husband continues to support him as before (but as a husband rather than as an employee). How does the marriage affect GDP? How should it affect GDP? GDP is affected because the husband is no longer employed and GDP will be reduced minus his salary. 4. Place each of the following
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